Co-employment and the contingent workforce: Do you know the risks?

Co-employment is a relationship between two or more employers whereby each has the legal responsibilities to the same employee.

Co-employment issues can present problems for the companies that supply contingent labor (temps, contractors, consultants, freelancers, and the like) and their clients. Often, client companies erroneously believe that the staffing company or other supplier they engaged the temp worker through is the sole employer of that worker. 


However, if the client company manages that contingent worker on a day to day basis, they could be regarded as a co-employer or special employer of the worker in conjunction with the worker's statutory employer - often a staffing company or 'payrolling' company. 


With co-employment, each company is liable for the decisions made by the other party. This means that if a contingent employee files a legal complaint and wins, both the supplier of the worker and the client company could be responsible for paying damages.


Co-employment risk is challenging to eliminate entirely, but there are many things you could take into consideration to reduce your risk considerably.


For the client company utilizing the contingent worker(s) services the following considerations may be observed:

• Do not discuss pay rates, increases or bonuses - this is the responsibility of the worker's statutory employer. A statutory employer is generally one who is liable for workers' compensation according to a statute establishing such an employment relationship. 
• Do not discuss opportunities for regular full-time employment without consulting the worker's employer. 
• Do not request that the worker complete timecards or forms with the client company's name on them. The worker's employer is responsible for all timecards and on-boarding paperwork (such as applications).
• Do not counsel assignment employees concerning: tardiness, punctuality, attendance, dress code, child-or elder-care arrangements or other personal matters.
• Do not inform an assignment employee that he or she is terminated or suspended. 
• Refer all questions relative to pay, benefits, duration of position or opportunity for employment to the worker's employer.
• Report any absences, tardiness or unacceptable behavior to the worker's employer.
• Inform the worker's employer about any changes in an employee's work schedule.

Emergent can help your company considerably reduce co-employment risks when working with contingent labor. 


Call us today on 855 250 5000 or e-mail info@emergent.com to find out how we can help you navigate the risks of hiring temporary labor!