Definition of Co-employment versus Outsourcing

  October 12, 2011

Outsourcing some or all facility management functions to a third party is pretty commonplace. Another way for facility managers to tap an external resource pool is by using temporary and part-time workers. Relationships between temporary staffing agencies and FM departments are the most familiar examples. As an aside, this is actually how I got into FM — as a temp receptionist, a position administered by the outsourced FM department. These relationships establish a co-employment situation that is legally different from outsourcing.

Here's a definition of co-employment, from Stormy Friday, president of the Friday Group. In legal terms, co-employment is a contractual arrangement that applies when two separate organizations have control over an employee's work or working conditions. Co-employment creates a situation in which temporary staff may or may not be viewed as employees of the FM department. It is important for the facility manager to maintain the distinction.

In these cases, both the FM department and the temporary staffing organization have actual or potential legal rights and duties with respect to the individuals on-site.

The term for co-employment or temporary staffing relationships is "employee leasing." In facility management, assignments for temporary staff may be short — filling in while a permanent employee is on vacation or out for short illnesses. More and more, however, temporary staffs are assigned to work on longer-term projects or have "indefinite assignments" that may extend for months.

In either case, the temporary staffing agency has responsibilities that include providing a paycheck, deducting and paying taxes, and providing worker's compensation and health insurance. At the same time, the FM department provides direct supervision and directs the daily work of temporary personnel when they are on-site. The FM department provides and controls the work environment and generally determines the length of the worker's stay within the organization.


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