What Is a Co-Employer and How Can One Help Your Business?


Are you looking to grow your business, while minimizing the cost and disruption a large workforce brings? If so, then you should consider outsourcing your human resources. This is known as co-employment, and if you know the benefits it frees you up to concentrate on the things that matter.

This relationship can seem confusing at first, but we can help you to understand it more. Read on as we discuss what a co employer service is and how it can benefit you.

What Is a Co Employer?

Co employment is a contract between a business and a personal employment service (PEO). This contract states that the two share the rights of responsibilities of hired staff members.

The person who has been hired will work for the business. They will perform all the roles and responsibilities that would normally be assigned as regular hires. They report to the managers of that company relating to their roles.

The PEO operates as an outsourced human resources company. They manage the payroll including tax, legalities, and accounting.

What Are the Benefits?

Firstly, the business no longer has to worry about payroll. All taxes and deductions are calculated on their behalf. In addition, they do not have to worry about compliance with HR regulations as all changes are managed by the PEO.

The PEO will also handle any worker’s compensation coverage. Any claims will not be the responsibility of the company, and the PEO can advise on workplace training and safety to minimize risks.

What Are Leasing and Joint Employment?

Co employment is very different to leasing and joint employment. These are two agreements that people often mistake it for.

Leasing is one of the business services in which organizations supplement their workforce with short-term, temporary staff members supplied by an agency. Joint employment is when two businesses share the employee, splitting their roles and responsibilities between two companies along with the necessary wages and legalities associated.

What Are the Risks?

The risks are minimal compared to the benefits to business services that co-employment can provide. Generally, it is only a risk if the PEO does not pay taxes on behalf of the company. In this instance, it is the company that gets penalized, not the PEO.

This could also be a problem if the business decides to change the PEO or stop using its services midway through a tax year. They may face a wage base restart on some payroll taxes.

However, if you find a reputable PEO with a solid reputation this is very unlikely to happen. Stick to well known, respected companies like the one found here https://avitusgroup.com/brea-california-orange-county-peo/

Finding a PEO

Now you know the benefits of co employer services, then find one in your local area. Check reviews and ask other business owners who have used their services. Book an interview and discuss what they can do for you.

If you enjoyed our handy article, then let us build your business with the help of our blog. With everything from finance to technology advice, we can help your organization grow.


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