Co-employment, a scenario where legal employer responsibilities are shared by two or more entities for a single employee, can be intricate and poses potential risks. In this article, we will explore some of the prominent challenges associated with co-employment and propose effective solutions.

1. Inadequate Classification of Independent Contractors

A common pitfall is the improper classification of independent contractors, which may lead to legal complications and audits. To mitigate this risk:

• Stay informed about the latest co-employment laws and restrictions.
• Clearly define classification requirements with external staffing agencies.
• Consider employing an Employer of Record (EOR) solution to manage legal responsibilities effectively.

2. Treating Independent Contractors as Employees

The tendency to treat independent contractors as in-house employees can disrupt workflow and lead to co-employment concerns. To address this issue:

• Implement a program to educate employees about appropriate interactions with independent contractors.
• Provide guidelines on the level of internal information to be shared with independent contractors.
• Recognize and treat independent contractors as distinct business entities.

3. Lack of Open Communication

Effective communication between independent contractors and employees is crucial to prevent confusion and co-employment issues. Solutions include:

• Establish a structured communication workflow for interactions with independent contractors.
• Designate a specific employee to communicate with independent contractors.
• Create comprehensive guidelines outlining expected services and deliverables.

4. Proper Questioning During Classification

Asking the right questions during the classification process is essential to avoid co-employment risks. A questionnaire for independent contractors may include:

• Expectations as an independent contractor and preferred employment status.
• Desired payment methods and communication preferences.
• Willingness to make investments and disclosure of potential legal factors.

5. Recognition of Independent Contractors as Business Entities

Failure to acknowledge independent contractors as separate business entities can lead to co-employment risks. Mitigation strategies involve:

• Setting clear boundaries and respecting independent contractors' schedules.
• Allowing flexibility for off-site work unless urgent.
• Avoiding unnecessary demands for on-site work from independent contractors.

Best Practices to Avoid Co-employment Issues

Consider implementing the following best practices to navigate co-employment challenges effectively:

1. Implement an EOR Solution: Leverage an Employer of Record (EOR) solution to streamline onboarding, ensuring compliance with co-employment laws and minimizing risks associated with global hiring.
2. Opt for a PEO Solution: Explore a Professional Employer Organization (PEO) solution, such as Remoly, to simplify compliance with local labor laws, manage payroll, contracts, and benefits efficiently, especially when dealing with international contractors.

Embrace the Remoly Advantage

When entering into co-employment agreements, consider partnering with HR outsourcing solutions like Remoly. Beyond PEO and EOR benefits, Remoly offers:

• Establishment of a robust HR infrastructure.
• Management of global employment and benefits.
• Expertise in working with global contractors to mitigate co-employment risks.
• Continuous guidance on security and compliance aspects.

Enhance your onboarding journey and ensure a trouble-free co-employment experience with Remoly.