Attend any recruitment or Human Resources conference and you’ll know that these industries are filled with mind boggling industry jargon. It can be overwhelming to try to understand all of it. One term that is particularly confusing is “co-employment”; however organizations face huge risks by not understanding this concept and taking the necessary steps to ensure they are protected against it.
Co-employment occurs when two or more legally separated employers share potential or actual employer responsibilities with mutual employees between the two organizations. It means that the two companies jointly employ the worker.
While this situation can be intentional, employers do not want co-employment situations when they are hiring contract workers. Employers do not want to be responsible for employment responsibilities and liability for their contingent workforce. However, while employers may think that their agreement outlines that the contract worker is self-employed, the CRA may actually find that a co-employment arrangement actually exists.
What happens if the CRA does find that your organization has a co-employment arrangement with your contingent workforce? The classic example of the consequences of co-employment is a case in which Microsoft had to pay $97 million to a group of temporary workers that were deemed employees. Because these people were deemed employees, they were therefore entitled to benefits and additional pay, and Microsoft had to pay these workers what they were owed, along with a hefty fine. Other organizations could be faced with similar penalties if the CRA finds that their contract workers are actually employees.
This is a huge risk that companies need to address. Co-employment sounds like another industry buzz-word, but employers cannot afford to ignore or misunderstand the consequences. The CRA has recently begun to increase its investigation into co-employment and contingent worker classification, and so you need to make sure that your organization is compliant with employment laws in order to mitigate your risk.
For more information about how you can mitigate your risk against co-employment, visit the CWS website or contact:Christina Fabugais
Contingent Workforce Solutions Inc.
Direct Phone: 416-642-9077
Toll Free: 1-866-837-8630 x9077