Co-employment liability in a PEO agreement

Co-employment is the legal doctrine that lets a Professional Employer Organisation share statutory employer duties with its client while the client retains day-to-day direction of the workforce. The PEO becomes the employer of record for payroll and benefits; the client remains the worksite employer for hiring, firing, and workplace safety.\n\nUnderstanding the split matters at contract signature. Wage-hour claims usually attach to both parties, while direction claims attach primarily to the client. See CPEO for how IRS certification tightens payroll-tax liability, ESAC for the industry accreditation vetting financial responsibility, and non-subscriber for how the doctrine changes in Texas. Practical placements turn on how those allocations show up in the signed service agreement, not on the doctrine in the abstract, so a client onboarding into any PEO should treat the contract review as the primary exposure control. Related state detail sits in the PEO state reference and reference material in the help centre.\n\n## What this doesn't cover\n\nThis entry defines the doctrine, not any specific PEO's contractual language; every co-employment agreement allocates responsibility differently and should be read line by line before signature.