Co-employment is about sharing the legal employer responsibilities of an employee by two or more employers. Does that sound difficult? Let us break it down for you. Co-employment is a type of arrangement where two different organizations possess legal rights and obligations for an employee.
That means, under the co-employment arrangement, a single employee has two different employers and the employee is accountable to both of them. Co-employment generally occurs when organizations collaborate with various staffing agencies to hire independent contractors.
Since the co-employment arrangement is pretty complicated on its own, it is evident that there’ll be some risks involved.
In this article, we’ll highlight some of those co-employment issues and the potential solutions. So, let’s get started!
Organizations often fail to set up a proper classification process for independent contractors. This could invite many future inconveniences for any business entity.
To begin with, you may get the title of “Employee misclassification” during an audit. Hence, it matters that each independent contractor you collaborate with is properly vetted.
One of the major co-employment concerns is treating individual contracts as in-house employees. It is possible that both you and your team have a good working rapport with the independent contractor.
However, make sure that you can set some boundaries. Extreme dependency on independent contractors can result in workflow issues.
Another critical co-employment risk is the absence of open communication between the independent contractor and employees. Organizations often don’t have an organized communication network to interact with the independent contractors and assign them their responsibilities. This creates confusion and various co-employment issues.
Classification of independent contractors can be a tedious process. However, you cannot ignore it at any cost. Remember that you’re sharing some confidential information with the temporary worker when you're entering into a co-employment agreement. So, if you don’t focus on the classification part well, it may lead to questionable consequences.
The easiest solution to this co-employment risk is asking the right set of questions. You can always prepare a questionnaire and ask the independent contractor to fill it. This will make sure that there are the least co-employment issues involved in classification.
Here are some of the questions that you can ask:
Another common co-employment risk source is how you treat independent contractors. They are separate business entities and it’s a mistake if you do not treat them like one. We understand that employers demand control when it comes to a co-employment agreement. But, they should not forget that independent workers have their own freedom and obligations.
Here are a few co-employment best practices that every business should know about:
Are the co-employment concerts bothering you? Then you should think of implementing an EOR solution. It takes care of all the co-employment laws and makes onboarding painless for employers. Here’s how an EOR solution can help you:
We hope you had a good understanding of co-employment risks. Next time you’re planning to enter into a co-employment agreement, make sure that you collaborate with an HR outsourcing solution like Multiplier to make the process trouble-free. Apart from offering excellent PEO and EOR benefits, Multiplier can also help you with the following:
So, make your onboarding journey better with Multiplier. Click here for the free demo!