Co-Employment
Definition
A legal arrangement where two entities share employer responsibilities for the same employee.
What is Co-Employment?
In a co-employment relationship, an employer and a PEO (like ExtensisHR) both have specific legal responsibilities for employees. The business manages day-to-day duties, while the PEO manages HR, payroll, benefits, and compliance.
Why is Co-Employment Important for Employers?
- Central to the PEO model
- Clarifies employer obligations and reduces risk
- Helps small businesses access enterprise-level employee benefits and HR support
FAQs
What is the purpose of a co-employment relationship?
It allows businesses to retain control of day-to-day management while a PEO handles HR, payroll, benefits, and compliance.
Does co-employment change who manages employees?
No. You maintain authority over hiring, performance, and operations, while the PEO manages back-end responsibilities.
Can co-employment reduce legal liability?
Yes. A PEO shares certain risks (e.g., tax filing, compliance), helping reduce exposure and administrative burden.
How ExtensisHR Can Help
As your co-employer, we:
- Assume legal responsibility for tax filings and HR compliance
- Administer employee benefits and workers’ comp
- Handle regulatory filings and employee support
- Help mitigate joint-employment risk