|
Both the PEO and the
client company establish common law employment relationships
with worksite employees. Each entity has a right to
independently decide whether to hire or discharge an
employee. Each entity has a right to direct and control
worksite employees - the PEO directs and controls worksite
employees in matters involving human resource management and
compliance with employment laws, and the client company
directs and controls worksite employees in manufacturing,
production, and delivery of its products and services.
The client
company provides worksite employees with the tools,
instrumentalities, and place of work. The PEO ensures that
worksite employees are provided with a workplace that is
safe, conducive to productivity, and operated in compliance
with employment laws and regulations. In addition, the PEO
provides worksite employees with workers' compensation
insurance, unemployment insurance and a broad range of
employee benefits programs.
PEOs create an
employment relationship with their workers. This
relationship exists in fact, not just in form. PEOs can
manage the risks attendant to the personnel functions that
they perform only if they establish an employment
relationship with their worksite employees. Unless a PEO has
a right to direct and control worksite employees, as well as
a right to hire, supervise, discipline, and discharge these
employees, the PEO will merely assume liability without
having a means to manage that liability.
PEOs manage their
employment liability exposure by monitoring and requiring
compliance with employment laws, developing policies and
procedures that apply to worksite employees, supervising and
disciplining worksite employees, exercising discretion
related to hiring new employees, and ultimately terminating
worksite employees who do not comply with requirements
established by the PEO.
<-
Back
|
