The PEO relationship involves a contractual allocation and sharing of employer responsibilities between dmDickason Staff Leasing Company (the PEO) and its client. This sharing of the employment relationship is called co-employment.
As co-employers with our client companies, dmDickason contractually assumes select employer rights, responsibilities and risk through the establishment and maintenance of an employer relationship with the workers assigned to its clients. More specifically, dmDickason establishes a contractual relationship whereby dmDickason :
Co-employs workers at client locations, and thereby assumes responsibility as an
employer (for specified purposes) of the workers assigned to that client;
Reserves a right of direction and control of the worksite employees;
Pays wages and employment taxes of the employees out of dmDickason’s account;
Provides workers’ compensation insurance and claims management services;
Reports, collects and deposits employment taxes with state and federal authorities;
Establishes and maintains an employee relationship with worksite employees that
is intended to be long term and not temporary;
Retains the right to hire, reassign and fire worksite employees;*
Administers all unemployment claim responses / claims hearings under its own SUI tax number.
Businesses today need help managing increasingly complex employer related matters including employee relations, workers’ compensation claims, payroll, payroll tax compliance, unemployment insurance claims and employment law compliance. dmDickason delivers these services by establishing and maintaining an employer relationship with the employees at the client’s worksite and by contractually assuming certain employer rights, responsibilities and risk.
Both dmDickason Staff Leasing Company and the client company establish a common law employment relationship with worksite employees. Workers become employees of two employers; the client retains supervision for the day-to-day activities and responsibilities of running their business while dmDickason assumes many of the responsibilities for human resources, including payroll processing, workers’ compensation and unemployment claims administration.
Each company has the right to independently decide whether to hire or discharge an employee, and each has a right to direct and control worksite employees. dmDickason directs and controls worksite employees in matter involving human resource management and compliance with employment laws, while the client company directs and controls worksite employees in the day-to-day delivery of the company’s products and services.
The client provides worksite employees with the tools, instruments, and a place to work. dmDickason can assist in ensuring that worksite employees are provided with a worksite that is safe, conducive to productivity, and operated in compliance with employment laws and regulations. In addition, dmDickason provides worksite employees with workers’ compensation insurance, unemployment insurance and a broad range of employee benefits programs.
*Unless dmDickason has a right to direct and control, hire and supervise, discipline and discharge worksite employees, dmDickason would merely be assuming liability without having a means to manage that liability.
When evaluating the employer role of either dmDickason or the client, the responsibilities and assumption of risk of each co-employer must be examined separately, because neither party alone is responsible for performing all of the obligations of employment. Each co-employer will be solely responsible for certain obligations of employment, while both parties will share responsibility for other obligations. These responsibilities should be clearly defined in a good client-PEO services agreement.
dmDickason's economy of scale enables each client to lower employment costs and increase the business’s bottom line. The client can maintain a simple in-house Human Resource infrastructure, or, none at all by relying on dmDickason . The client also can reduce hiring / payroll and benefits overhead by not having to hire a full-time Risk / Safety Manager, Payroll Manager, Unemployment Claims Coordinator and / or Human Resource Manager (not to mention additional support staff, additional payroll taxes, benefits, supplies and office space).
The Small Business Administration reports that the business Owner or Manager spends roughly 7% to 25% of his/her time just handling employee related paperwork. Add it up – the “business of human resource management” can become very expensive, very quickly! dmDickason , however, provides time-savings by handling many routine and redundant tasks for you. This enables the business Owner or Manager to focus his/her time on the company’s core competency and concentrate on the operational and revenue-producing side of its operations.
Worksite employees seek financial security, a safe working environment, on-going / quality professional support and opportunities for retirement savings. dmDickason can provide Fortune 500 quality employee benefits including health insurance, 401-(k) savings plan, and aggressive worksite risk management. Job security is improved as dmDickason’s economy of scale permits a business to lower employment related costs. Job satisfaction and productivity increases when workers are provided quality human resource services like employee handbooks, grievance procedures and improved communications.
It is estimated that 2-3 million American workers are currently employed in a PEO arrangement. PEOs are operating in every state, and the industry has grown between 20-30% per year. Today, there are approximately 2000 PEO companies who are responsible for over $42 billion in sales revenue.
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