A co-employer can relieve you of a load of paperwork-but watch out for these legal traps.
Interwest Insulation of Seattle had 16 employees-enough to require a raft of paperwork but not enough to justify a human resources manager to take care of it all. And like many small businesses, Interwest couldn't afford to offer its employees big-league benefits. So Interwest turned to an employee leasing company.
Owner Scott Sonners entered into a contract with Barrett Business Services Inc. in which Barrett hired almost all of Interwest's employees, including Sonners himself, then leased them back to Interwest. The two companies became joint employers. The employee leasing agreement stated that the workers would be employees of Barrett for certain purposes, including hiring, discipline and firing, payroll, benefits, and workers' compensation insurance. Interwest would retain control of the business side of employee issues and follow Barrett's instructions on such matters as workplace safety. Under the new arrangement, safety improved and so did employee benefits. Sonners was able to concentrate on the business of his company rather than on keeping track of employee paperwork.
Continue reading this article - and everything on Entrepreneur!
We make some of our best content available to Entrepreneur subscribers only. Become a subscriber for just $5 to get an ad-free experience, exclusive access to premium content like this, and unlock special discounts.
Entrepreneur Editors' Picks
Crypto Doesn't Have to Be Serious. Just Ask This Comedian Who Organized a Conference About Failure in the Industry.
Want to Succeed? Turn Your Fixed Mindset Into a Growth Mindset.
Google's CEO Is Asking Employees 3 Simple Questions to Boost Productivity
'Greatest Storyteller Wins.' Katy Perry on the Surprising Link Between Pop Stardom and Entrepreneurship.
The 5 Personalities You Meet in a Coworking Space
'Man's Best Friend' — and Investment: The Thriving Industry of Pet-Related Franchising