Co-employment is the legal shape of a PEO arrangement, and it is routinely described in a way that makes it sound either trivial or alarming. Neither is right. It splits the employer's duties in two: the provider takes the administrative and tax half, you keep the direction and the day-to-day half, and the contract says which is which.
What moves to the provider
Payroll processing and payment, employment tax reporting and deposits under the provider's identification number, benefits administration and usually the benefit plans themselves, workers' compensation cover, and much of the statutory paperwork. In a certified arrangement, federal employment tax liability on the wages the organisation pays moves too, which is the sharpest edge of the split and the one the certification exists to define.
What stays with you
You recruit, you decide who is hired and who is promoted, you set the work and the standards, you manage performance, and you decide who leaves. The provider is not choosing your people and cannot be made to carry that. Employment claims arising from how you treat somebody generally remain yours in substance, whatever the shared status implies, so read the indemnity clauses closely rather than assuming a co-employer absorbs conduct risk.
The practical questions the shape raises
Whose name is on the employment paperwork your staff sign; whose handbook governs; what happens to your workers' compensation experience when you enter and when you leave; and whether the benefit plans renew in a way that lets you exit without stranding people mid-year. Those four answers matter more than the fee, and none of them appears on a pricing page, because no provider in this record publishes one.
Questions people ask about coemployment
What is co-employment?
An arrangement in which a professional employer organisation becomes an employer of your staff for administrative and tax purposes while you keep recruiting, directing and managing them. The contract allocates the duties between you.
Do my employees become the PEO's employees?
For administrative and tax purposes they become the provider's too, which is what co-employment means. They remain yours for the purposes that matter day to day: you decide the work, the pay, the promotions and the exits.
Does co-employment protect me from employment claims?
Not by default. Claims about how staff are treated generally follow the party doing the treating, and the contract's indemnities decide the rest. Read them; do not assume shared status means shared liability for your own conduct.