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How Does Co-Employment Help With Business Compliance?

How Does Co-Employment Help With Business Compliance?

When business owners start their companies, they have a vision for the future: providing for their families and creating profit by engaging in the work for which they have a passion. Unfortunately, a large part of owning and operating a business is dealing with compliance issues related to federal and state labor laws. These compliance matters can come with incredible amounts of paperwork and can take employers and business owners away from the day-to-day operations of their businesses.

Fortunately, PEOs like Einstein HR can help. Founded by veterans of the PEO and Human Resources Outsourcing industry, Einstein HR employs experts in compliance matters. By teaming up with a PEO like us through the co-employment relationship, companies can help ensure that their operations remain in line with existing regulations, lowering their overall risk profile.

Defining the Co-Employment Relationship

When a client business hires a PEO, it enters into a relationship with that PEO called co-employment. While the term may be a bit scary to some business owners, there is no increased risk when signing a co-employment agreement. The arrangement simply allows the PEO the legal right to perform some its key duties, such as:

  • Payroll Management
  • Employee Benefits Administration
  • Workers’ Compensation Claim Handling
  • Withholdings

Business owners who engage in a co-employment relationship do not lose control of their business and remain the primary employer of their employees. They are usually referred to as “The Executive.”

The Role of the Executive

The Executive, or business owner/employer, remains the primary employer of their employees. They still retain control over the direction of their company and have the final say in all hiring and firing decisions. Simply put, the PEO works for the Executive by providing services and does not usurp any of the Executive’s authorities. Of course, when a business owner signs a co-employment agreement with Einstein HR, they can select the services they require before signing the official contract.

The Role of the PEO

In a co-employment relationship, the PEO is considered a co-employer of a company’s employees, though it is not the primary employer. Its role is to perform the services specified in the co-employment agreement at the discretion of the Executive. By becoming a co-employer, the PEO has the legal right to handle employees’ sensitive information, such as payroll. Also, since the PEO is a co-employer with all of its client businesses, its employee pool is larger than that of any one company and it therefore can provide higher-tier benefits packages for lower individual prices, since its costs are spread out over exponentially more employees.

PEOs and Compliance Issues

Though Professional Employer Organizations can provide a wide variety of human resources and accounting services to companies in need, they also are able to help businesses with compliance issues through the co-employment relationship. Not only does it behoove the PEO to ensure compliance since it is a co-employer and assumes some of the liability of the client business, but some of the services of a PEO are directly related to compliance.

Workers’ Compensation

Workers’ Compensation is legally required insurance for most employers. By teaming up with a PEO, businesses can gain access to the experience of experts in this area. At Einstein HR, we specialize in a variety of Workers’ Compensation services, including the handling of claims, the reduction of claims through safety procedures, risk reduction, reporting, and more.

The Affordable Care Act

One of the chief issues facing businesses today is compliance with federal regulations like the Affordable Care Act. PEOs make compliance with these laws and regulations their business. When a company engages in a co-employment relationship with a PEO like Einstein HR, they will bring dedicated, knowledgeable employees into the fold who are experts at these complex legal restrictions.

There are innumerable regulations on the federal, state, and local levels that apply to small and new businesses. For business owners — especially those whose companies have between five and 100 employees — these regulations can be too complex and numerous to handle. Luckily, PEOs like Einstein HR have decades of experience handling such matters and can help keep companies compliant.

Start Ensuring Compliance By Working With Einstein HR Today

Increasing numbers of businesses are using PEOs, with the rate of growth within the PEO and HR outsourcing industry much higher than the growth of the overall U.S. economy. If you are a business owner, the time to start looking into PEOs and co-employment is now. PEOs like Einstein HR can help client businesses stay compliant with the myriad laws and regulations that apply to various industries. They are also able to provide all of a client company’s HR and accounting services at a lower price than a full-time, in-house staff.

If you are looking to start your relationship with a trustworthy PEO backed by years of experience, fill out the form on Einstein HR’s contact page today or call us at 770-962-1700.

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