Managing Co-employment Risk When Using a Staffing Agency
Co-employment is an important issue for any company using long-term contractors. In 2000, Microsoft’s $97 million settlement for benefits liability to the contract workers who provided services from 1987 to 2000 raised co-employment awareness nationally. To limit exposure to co-employment benefits risk, companies have enacted various policies for using contractors such as placing time limits on their use, rotating staffing firms, etc.
However, these policies don’t get to the crux of the co-employment issue, but rather, underserve the companies that need long term contractors. A solid understanding of both co-employment and how to work with a staffing firm to best handle this issue is an important step in managing risk.
This paper will address these points by defining co-employment and co-employment liability as they relate to benefits, discussing the implications of the Microsoft case, and suggesting ways to lessen co-employment risk when using a staffing agency.
