The Requirements of a Co-Employment Arrangement

employment agency insurance

There is a broad array of staffing operations geared towards helping their clients fill short-term positions at their places of business. These agencies are all different, from the industries they serve, to the exposures they face, from lower risk levels to higher hazard concerns. Their clients can range from staff clerical, to healthcare, technology, warehousing, manufacturing, industrial, and lots of other business models.

Staffing agencies and the companies that employ them need a solid understanding of co-employment and what it will take to work with a staffing firm in order to better handle many of the issues that may arise from this type of relationship. One important step in managing these risks that can occur is securing the appropriate employment agency insurance policies designed to address those matters.

Working in a co-employment environment

Co-employment is defined as a relationship between two or more employers in which each has actual or potential legal rights and duties with respect to the same employee. In a single employer/ employee relationship, the employer bears certain responsibilities with respect to his or her employees, including paying wages, overtime pay, and taxes.

In co-employment, the employer of record has certain obligations with respect to providing workers compensation, benefits and pension plans, as well as ensuring civil rights compliance, appropriate labor/management relations, and a safe work environment. In co- employment, these responsibilities are often shared depending on how the relationship between the two entities is initially set up or created.

Co-employment is inherent in staffing firm/client relations, and since both have sufficient contact with an assigned employee, each company will legally be viewed as an employer. The staffing firm is viewed as the primary employer and bears most of the responsibility for the employee. The client, for their part, takes full responsibility for supervising and directing day-to-day work assignments.

Both entities must adhere to the safety and well being of any temp employee at all times. Having employment agency insurance protects both the workers and the staffing company when safety issues, rights violations, or other claims relating to negligent acts become an issue that must be addressed.