Co-employment is a process whereby PEOs (professional employer organizations) assume some of the responsibilities and rights of an employer. They become an “employer of record” for the client company so that they are legally able to perform services like remitting wages, enforcing and implementing a sexual harassment policy, and providing employee benefits. However, some risks can be incurred if either the PEO or the company fails to abide by a co-employment agreement and oversteps their bounds.
Risks of a Poorly Constructed Co-Employment Agreement
The main risk, for a company, of a co-employment arrangement is failing to have a clear and well-organized agreement that dictates the roles and responsibilities of all of the involved parties. For example, a recent court case involving tech giant Microsoft and its independent contractors resulted in the company having to pay nearly $100 million because the court determined that Microsoft overstepped its bounds and did not act equitably in its co-employment arrangement.
With NetPEO, client companies have access to the nation’s largest network of PEOs. We match businesses with several PEOs based on a needs assessment, and then companies can select the specific PEO they want to hire before signing a co-employment agreement.
Though even large companies like Microsoft are not immune to violating a co-employment arrangement, the combined experience of our PEOs helps to ensure that the co-employment agreements are well-structured. Clients will have access to a variety of arrangements from which they can choose, offering clarity on the division of responsibilities between the client and the PEO.
Benefits of a Co-Employment Arrangement
There are numerous reasons that companies turn to co-employment arrangements with PEOs. PEOs can offer a wide variety of specialized services that might otherwise require the business owner to hire an in-house team of HR representatives or spend countless hours managing HR minutiae.
At NetPEO, our network of PEOs offer services both on a wholesale level and as a pick-and-choose, a la carte system. Generally, outsourcing wholesale services is a better deal for companies—especially smaller companies with between five and 100 employees. Services that our PEOs offer include:
- Recruitment services
- Employee management
- Organizational development
- Payroll management
- Employee benefits
- Legal compliance measures
- Employer liability management
- Policy development
Having this co-employment arrangement often is a much better proposition for companies than simply trying to perform those same duties by themselves.
- Co-employment is a better choice because it allows companies to utilize the services of HR experts.
- Co-employment is a better choice because it provides a wider pool for employee benefits, thus reducing the risk of employee turnover.
- Co-employment is a better choice because it means these PEO professionals have a vested interest in the success of your business, since they are tied to you in a business relationship.
How NetPEO Can Help Your Business
Aside from having the largest network of PEOs in the nation with more than 40% more PEOs than the nationwide average, NetPEO can help clients at every step throughout the co-employment process.
At the beginning of the process, we match client companies with potential PEOs based on an analysis of each client’s specific needs. Then, you (the client) can select which PEO is right for you and sign the co-employment agreement so that they can start offering you the services you need. As our PEOs have more than 200 years of combined HR experience, you can rest assured that they are more than able to step up to the challenge.
However, unlike other PEO brokerage services, NetPEO does not end its services there. Instead, we follow up regularly to ensure that you are continually happy with the result of your co-employment relationship with our networked PEOs. Because of this continuous support, NetPEO boasts:
- A 95% client retention rate (the highest in the industry!)
- 100% customer satisfaction (either satisfied or extremely satisfied on our client surveys)
Start Your Co-Employment Relationship Today
If you are the owner of any-sized company, outsourcing your HR needs has vastly more benefits than risks. NetPEO can help you connect with a PEO today so that you can start worrying more about the day-to-day operations of your business than about tangential topics like employee benefits or HR policies. Simply fill out the form on our contact page or call us at 678-376-1212 to start your co-employment process.