CO-EMPLOYMENT 101:

CO-EMPLOYMENT 101:
Understanding Relationships, Risks & Red Tape
Employer accountability has been a source of
pain for businesses in the United States, and
the government is making its push to address
those concerns. In order to hold employers more
accountable, government agencies have more
clearly defined the roles and responsibilities of the
stakeholders in a co-employment relationship.
WHAT IS CO-EMPLOYMENT?
In a common employer-employee relationship, the
employer has specific responsibilities. They must:
• Pay the employee’s wages and overtime pay
• Withhold and pay taxes on behalf of the employee
• Provide worker’s compensation and
unemployment benefits
• Ensure compliance with civil rights, labor laws,
and more
888.459.9922 | WWW.TPGWORKS.COM
In co-employment, however, these obligations may be
shared by two different employers – such as a staffing firm
and its client.
Both parties in this arrangement make sufficient contact
with the temporary employee. Both can be described
as the employer. In many cases, the staffing agency is
considered the primary employer – bearing the majority of
employee responsibilities.
WHAT ARE EACH EMPLOYER’S
RESPONSIBILITIES?
Temporary workers and
employees are treated
the same regarding
OSHA record keeping.
Staffing Firm:
• Pay employee
• Withhold and pay payroll taxes
• Provide worker’s compensation and
unemployment benefits
• Ensure civil rights compliance
• Able to hire and fire employee
• Handle complaints regarding working conditions
• Train on general safety issues
Client:
• Direct and supervise day-to-day tasks
• Manage and ensure safe working conditions at
work site
• Ensure civil rights compliance by employees
• Define length of employee assignment
• Train on location specific safety issues
888.459.9922 | WWW.TPGWORKS.COM
CONCERNS WITH COEMPLOYMENT
qualifies you as a joint employer, not the
When you extend your control into the
So, how do you determine if you’re the
responsibilities of your staffing agency, you
primary or secondary employer? The
are taking on some of the roles of a primary
determination is often made based on
employer. And this puts your company at risk.
worker control, pay, and benefits. The
primary employer.
If you can be considered your temporary
worker’s primary employer, he or she will then
be considered your “common law employee.”
And you would be subject to greater liability.
following are seven factors used by the Wage
and Hour Division of the U.S. Department of
Labor to identify the primary employer:
1. Does the other employer direct, control,
or supervise (even indirectly) the work?
For example, you could unknowingly
misclassify this worker based on the IRS’s
definition. Employment taxes would be just
one headache you would have to deal with.
ARE YOU A JOINT
(SECONDARY) EMPLOYER?
In September 2015, the National Labor
Relations Board ruled that companies
using temp employees are considered
“joint employers.” The new ruling no longer
requires you (as a joint employer) to exercise
direct control over a temporary worker. The
authority to manage a temp day-to-day only
2. Does the other employer have the
power (even indirectly) to hire or fire
the employee, change employment
conditions, or determine the rate and
method of pay?
3. How permanent or lengthy is the
relationship between the employee and
the other employer?
4. Does the employee perform repetitive
work or work requiring little skill?
5. Is the employee’s work integral to the
other employer’s business?
888.459.9922 | WWW.TPGWORKS.COM
6. Is the work performed on the other employer’s
premises?
7. Does the other employer perform functions for the
employee typically performed by employers, such
as handling payroll or providing tools, equipment, or
workers’ compensation insurance, or, in agriculture,
providing housing or transportation?
It’s important to note, though, that there are still instances
in which you should treat your temporary employees
virtually the same as your permanent employees. For
example, temporary workers and employees are treated
If people are working
at your place of
business, you need to
treat them the same
whether they are
temporary or full time.
the same regarding OSHA record keeping.
Employees who are jointly employed are also counted
toward the 50-employee thresholds of each employer (as
outlined by the Family and Medical Leave Act).
REDUCE THE RISKS OF
CO-EMPLOYMENT
There are several important measures you can take to
minimize the risks of co-employment.
For starters, work with reputable staffing agencies you
can trust and cover all of your legal bases. This includes
maintaining a safe work environment and avoiding any
discriminatory conduct. And if you work with a firm that’s
staffed a large number of your temporary employees,
a representative of the agency should provide on-site
supervision
888.459.9922 | WWW.TPGWORKS.COM
Below are further measures you should take
Detail Your Training Agreement In
to minimize your risk:
Your Contract
Learn What Training Your Worker
Has Had
Even if you’re working with a respectable
staffing firm, you should ensure that a
temporary worker has received proper
training for specific skills, such as operating
a forklift. A good staffing firm will help advise
you on this process if need be. In fact, the
If a temporary employee is performing work
on your site, you should have some baselevel expectations about their training. It
would be wise to confirm that they have
received this basic training and then get this
in writing as part of your contract with your
staffing agency. A worthy staffing partner will
not object to this.
worker’s certification as a forklift driver is
Consider Each Person’s Learning
nontransferable from his last company to
Style And Needs
yours so they need to be recertified before
Think about the different ways in which
they work for you.
people learn. Some are more visual learners
Train Workers On Using Specialized
Equipment
Your staffing firm will not be able to train
workers to use your specialized equipment.
It’s not that a good staffing firm doesn’t want
to, it is simply because they are unable to. It is
the responsibility of the company to provide
any hands-on training within their facility.
and some excel better by reading. It is
important to adapt to each worker in order
to integrate him of her into your company
and ensure their safety (and that of your
other employees). It wouldn’t benefit you to
simply give someone a handbook and expect
them to learn what he or she fully needs to
know. Embrace their learning style and watch
them grow.
888.459.9922 | WWW.TPGWORKS.COM
If people are working at your place of business, you need
to treat them the same whether they are temporary or full
time. There are no longer any circumstances in which one
stakeholder bears complete responsibility for a worker. You
will have your duties, and you must accomplish them. Even
as the secondary employer, there is plenty on your plate.
With the U.S. government’s focus on co-employment,
you must ensure you are holding yourself accountable
and addressing your responsibilities. By working with a
reputable, client focused staffing firm you will be able to
protect yourself from the unnecessary risks that can harm
your business and ensure the employees you bring on
board are properly trained, vetted and ready to help your
business succeed.
The staffing agency is considered the
primary employer – bearing the majority
of employee responsibilities.
888.459.9922 | WWW.TPGWORKS.COM