The Truth Behind Co-Employment: 4 Common Myths

The concept of co-employment can be intimidating at first blush. Wouldn’t that mean losing control of your business and staff?

In fact, the opposite is true. Co-employment can be empowering and conducive to business growth, the attraction and retention of better talent, and ultimately, increased profitability.

Dispelling the Myths

Here are four common myths about co-employment:

Co-employment is the same thing as joint employment.

The two sound similar, but there are important differences between them. If you opt for co-employment through a partnership with a professional employer organization (PEO), employment responsibilities will be split between the PEO, as employer of record, and you, as the worksite employer.

• You will not lose control over your business or your staff.  For most small to mid-sized companies, there are many benefits to a PEO partnership. For instance, you’ll have access to more competitive benefit options and risk-sharing in liability matters. Plus, your PEO will take over time-consuming HR administrative tasks, freeing you up to focus on more business-critical matters.
• Joint employment, by contrast, is when two or more companies exercise control over the work of onsite employees. For instance, one company in a joint employment partnership may be fully liable if the other company fails to pay employee wages. This is not the case in a PEO relationship.

I can’t afford to pay a PEO.

Co-employment with a PEO actually saves you money in the long run. Just one example: Workers’ compensation rates will typically be lower if you partner with a PEO. And, you can opt for “pay as you go” premiums based on your payroll among, versus a fixed dollar amount.

• Additional – and better – benefit packages are accessible to you because your PEO will pool its client employees together and use this group purchasing power to your advantage. You may have thought you’d never be able to compete with that Fortune 500 competitor down the street when it came to benefit packages, but now you’re back in the game.

My employees will be threatened by co-employment.

Yes, co-employment will be a change. But, having dedicated professionals handle their payroll, benefits and other HR needs is a major plus for your employees.

• It’s also a time saver: Many employee needs can be efficiently handled by your PEO. For example, portals may be implemented, making it much quicker and easier for employees to change tax deductions, revise direct deposits, add covered individuals to their health insurance, and the like.

If I sign on with a PEO, I’ll have to fire my current HR staff.

When you work with a PEO, hiring and firing decisions, including those that apply to your in-house HR staff, are entirely up to you. You can keep your current staff and they can work in seamless tandem with your PEO team. In fact, your current staff will have more time to focus on more strategic initiatives, versus time-consuming administrative tasks.  

Considering Co-Employment and PEO Partnerships? Key HR Can Help!

To learn more about co-employment, PEO partnerships, and similar preferred provider relationships, contact Key HR today. We can provide your company with more service providers than any other business of our kind, including those offered by PEOs and specialists in every area of HR management. We look forward to finding the solution that works for you.