January 09, 2018

Co-Employment vs. Employee Leasing: How Do They Differ?

One of the most common misconceptions about PEOs and the relationship they share with clients is that it is employee leasing. Also known as a temporary employment arrangement, employee leasing incorrectly gets associated with professional employer organizations.

The actual relationship between a PEO and its client is called co-employment. While this is where the confusion comes from, co-employment and employee leasing are drastically different.

The biggest difference is that in co-employment relationship through a PEO, the PEO does not provide staff for their client. This responsibility falls on the client, as does any other staff and business-related decisions. This includes hiring new talent after the PEO partnership is established.

It's also important to note that in a PEO partnership, small business owners retain full-control of their business, including the hiring and firing of staff. 

To help with this common myth, we published a blog post that takes a much closer look at the differences between co-employment and employee leasing, and why overcoming this myth can help brokers and small business leaders.

Click here to view the article on the Extensis blog.

Want to learn more about PEOs? Check out our eBook, How Well Do You Know PEO? This eBook provides an overview of the PEO industry as well as helpful information for brokers and employers!

How well do you know