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The Benefits of Co-Employment




November 22, 2011 - Outsourcing

Using temps and part-time workers from a staffing agency is one way for facility managers to tap an external resource pool. Successful co-employment requires navigating some specific laws and regulations, but it's not all downside of course. Stormy Friday, president of The Friday Group points out the following positive aspects of co-employment arrangements:

  • Workers' compensation. It is through state workers' compensation laws that employees accidentally injured on the job are awarded benefits on a no-fault basis and are prohibited from suing employers for further damages. Most courts have said that under a co-employment provision, the customer organization is a "special employer" covered under workers' compensation laws in the same manner as other employers.
  • Employment status verification (I-9). The temporary staffing firm is entirely responsible for verifying the status of individuals hired for temporary work. It is also up to the temporary staffing firm to ensure that information they obtain on employment status in not used to discriminate.
  • Employment taxes. The Internal Revenue Service is clear (and court cases have upheld the regulations) that temporary staffing firms act as the sole employer with respect to withholding employment-related taxes.
Friday recommends the following steps to make certain that co-employment arrangements run smoothly and that the temporary staffing company retains and maintains the employer-of-record status.
  • Clear, written policies and procedures should be developed regarding use of temporary staff and the relationship between the FM department and the staffing firm. These documents should cover length of stay of temporary staff, safety on the job, wages and hours worked, civil rights, testing for pension plan inclusion, workers' compensation, verification of employment status and employment taxes.
  • It is important to have a well-articulated contract with the temporary staffing firm to ensure the temporary staffing firm maintains its employer status. The scope of work should include issuing paychecks; withholding taxes; providing required insurance, interviewing, assigning and reassigning work; setting pay rates and benefits; maintaining supervisory responsibilities; and evaluating staff performance.
  • Although training might be a standard component of the FM department’s staffing plan, it is important not to extend training opportunities to temporary staff. With the exception of basic instructions on how to perform the work assigned through the temporary staffing firm, temporary staff should not be involved in any FM-department-supported training.
  • FM departments need to be careful that they do not provide job coaching or counseling to temporary staff. They also need to be certain that they don't discuss job vacancies within the organization. When this occurs, it creates the appearance that the temporary employee is being treated like a permanent employee.
  • Finally, while it may be common practice to include contractors in employee functions to foster partnership, facility managers should not include temporary staff in FM staff functions. Similarly, FM departments should not extend privileges such as use of the health club or tickets to events to temporary staff.

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