A Guide to Understanding Co-Employment

What is Co-Employment?

The term co-employment describes a legal relationship between two or more employers in which the employers have actual or potential legal rights and duties with the same respect to the same employee or employees.

How do co-employment issues arise?

Employers have many legal obligations to their employees. These include providing wages and workers' compensation coverage, maintaining a safe work environment, safeguarding employees' civil rights and freedom to bargain collectively, etc. Employers also may have obligations to third parties if the employee's work related activity cause harm to others.

The law imposes employer obligations on an entity when it expressly or implicitly undertakes an employer obligation. Whether employer liability is imposed will depend on particular facts and circumstances of the employee/employer relationship.

How do co-employment issues affect the relationship between staffing service companies and their customers?

Customer liability issues generally arise when the customer violates some law, or when the customer deals with a supplier that fails to meets its employer obligations. In one key area; workers' compensation, the customer's co-employer status actually protects the customer from liability.

Dakota Staffing Solutions and its customers usually have enough contacts with the temporary employees assigned that both could be viewed as employers.

Dakota Staffing Solutions pays the employees, pays all the payroll taxes, provides workers' compensation coverage, has the ultimate right to hire and fire, hears and acts upon complaints from its employees about working conditions, etc.

Customers on the other hand, supervise the employees' work, provide the work site and tools and equipment, control working conditions at the work site, and determine the work hours and length of the assignment.

Dakota Staffing Solutions is committed to meeting all its employer obligations relating to its temporary employees, paying wages and providing benefits, withholding and paying applicable payroll taxes, providing unemployment compensation and worker's compensation coverage, etc.

Dakota Staffing Solution does not, however, assume responsibility for the actions of customers which may independently give rise to liability to Dakota staffing Solutions employees or third parties.

What can I do to reduce my company's exposure to co-employment liabilities when I use employees from Dakota Staffing Solutions?

  • Do not discuss pay rates with Dakota Staffing Solutions employees; Dakota Staffing Solutions is their employer and should handle all pay rate issues.
  • Provide a detailed job description to Dakota Staffing Solutions and have Dakota Staffing Solutions screen and select the employee for the position; do not consistently pre-screen or interview temporary employees for temporary positions.
  • Regularly communicate performance evaluations of Dakota Staffing Solutions employees to Dakota Staffing Solutions. Have Dakota Staffing Solutions provide the performance feedback to its employees. Do not treat temporary employees as your employees by evaluating them as you evaluate your own employees.If your volume of temporary employees is high, you can request Dakota Staffing Solutions to clarify the relationship between Dakota Staffing Solutions, Its employees and your company.
  • If your volume of temporary employees is high, you can request Dakota Staffing Solutions to clarify the relationship between Dakota Staffing Solutions, Its employees and your company.
  • Have Dakota Staffing Solutions handle personnel matters relating to its employees; do not maintain personnel records on Dakota Staffing Solutions employees.
  • Let Dakota Staffing Solutions furnish employee benefits to its employees. Do not furnish Dakota Staffing Solutions employees with employee benefits through your benefits programs.
  • Avoid taking direct action to terminate a Dakota Staffing Solutions employee's assignment. If you want to replace a Dakota Staffing Solutions employee, contact the office immediately to discuss.
  • Have Dakota Staffing Solutions, not your personnel, distribute payroll checks to Dakota Staffing Solutions employees.
  • Maintain a safe working environment. Provide any necessary site specific safety training) Dakota Staffing Solutions will provide general safety information). Promptly report any Dakota Staffing Solutions employee injury to Dakota Staffing Solutions immediately.

 

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