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Why Should New Businesses Consider Co-Employment?

Why Should New Businesses Consider Co-Employment?


Co-employment, also called Professional Employer Organization (PEO) is a relationship between your company and another company, where they become the employer of record and help your company become more efficient in its human resource (HR) costs. Whether you should consider co-employment depends many factors, such as your current and future business needs.

Any young company that’s looking to grow while maintaining low costs should at the very least consider co-employment. There are many benefits, which will we detail below. If you are ready to start a co-employment partnership, complete our contact form to get the process started with Einstein HR!

Your Needs Exceed Traditional HR Outsourcing Offers.

Traditional outsourcing involves using a human resource (HR) professional as a contractor. You tell them what specific tasks you want done such as payroll or training. You keep other human resources functions such as picking employee benefits. Also, the HR company does not legally represent you.

Co-employment gives your new business the option of:

  • Having an HR provider that is your legal employer of record.
  • Allowing your business to qualify for better HR outsourcing benefits or prices because you are part of a larger business when teaming with a PEO.
  • Your HR provider can represent you in employee disputes and employment claims.

You Want to Provide Competitive Employee Benefits.

If you are not offering an employee benefits program right now, working with a PEO provider is a great way to start one. This can be done at no cost to your business. If you already have an employee benefits program set up, having a co-employer take it over may be a better option. In both situations, your business benefits from having an expert in the HR field provide a strong employee benefits plan at a savings for you.

You Need Workers’ Compensation Coverage.

The type of workers’ compensation coverage your company needs depends on:

  • National Council on Compensation Insurance (NCCI) class.
  • NCCI codes.
  • Type of risk your employees take when working.

A co-employer has the ability to provide you with a deductible program and larger discounts under its policy. It can price your company’s insurance at an appropriate amount. It can also pay your claims.

Improved Cash Flow For The Business.

Working with a PEO provider will potentially help your business save money in a variety of ways. For example, its’ goal is to assist you in streamlining your workforce costs. Less employees who are more highly-trained leads to more money for your business.

Your co-employer will work many areas to help you increase your case flow such as:

You Need to be in Compliance.

Being in compliance with government agencies is the difference between paying hefty fines and no worries. The government does not care if you are a new business or not when it levies penalties for not being in compliance. You don’t have enough time in the day to follow every change in a HR rule or regulation. Your PEO provider is an expert is following the rules and procedure.

As your co-employer, it shares liability to ensure you remain in compliance in all areas such as:

  • FMLA
  • Payroll taxes paid on time
  • Insurance standards
  • Workers’ compensation is current

3 Co-Employer Myths

Some new business may avoid partnering with a co-employer because of the myths about the HR outsourcing services. There is a real difference between what PEO can do for you and what is myth. Here are some debunked myths about co-employer:

  1. You will lose control of your business. That is not true. You worked hard to start and maintain your company and partnering with a co-employer won’t change that. A co-employer works with you to ensure your company runs smoothly.
  2. You won’t have the ability to choose who is hired and/or fired at your business. You retain control to hire, fire or retrain any employee. A great PEO partner will help you decide the skills and talent needed to make your staff a success.
  3. My staff is temporary under a co-employer partnership. No, you have permanent employees. The co-employer is a temporary worker with your business.

Co-Employment is Right for Your New Business.

You are ready to take the next step with your new business and make it a success. Partner with us. Einstein HR combines great customer service with HR expertise. Let us become your co-employer partner. Contact us for a free consult about your PEO needs. Call us at 770-962-1700.

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