--- title: How a VMS Protects you from Co-Employment Risk description: Learn what co-employment risk is, and how a Vendor Management System (VMS) reduce risk and liability. image: https://www.conexisvmssoftware.com/hubfs/1.%20MASTER%20MASTER%20Blog%20and%20Website%20Page%20IMAGES%202026/CONTINGENT%20WORKFORCE/CWF%201200x627%20%20optimized/contingent-workers--partnership-meeting-man-glasses-1200-627-33.jpg --- - [BOOK A DEMO](https://www.conexisvmssoftware.com/book-a-demo) - [TAKE A TOUR](https://www.conexisvmssoftware.com/self-guided-tour-of-conexis-vms-vendor-management-system-demo) [![Conexis Logo](https://www.conexisvmssoftware.com/hubfs/CONEXIS%20LOGO/ConexisLogo%20Square%20Green-Black-FINAL-1.svg) ![Conexis Logo](https://www.conexisvmssoftware.com/hubfs/CONEXIS%20LOGO/ConexisLogo%20Square%20Green-Black-V2.svg)](https://www.conexisvmssoftware.com/) [![Conexis Logo](https://www.conexisvmssoftware.com/hubfs/CONEXIS%20LOGO/ConexisLogo%20Square%20Green-Black-V2.svg)](https://www.conexisvmssoftware.com/) - 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[TAKE A TOUR](https://www.conexisvmssoftware.com/self-guided-tour-of-conexis-vms-vendor-management-system-demo) 4 August 2026 # How a VMS Protects you from Co-Employment Risk [![Wayne Burgess](https://www.conexisvmssoftware.com/hs-fs/hubfs/Wayne100.png?width=30&height=30&name=Wayne100.png) Wayne Burgess](https://www.conexisvmssoftware.com/blog/author/wayne-burgess) - - - Managing a contingent workforce brings flexibility, but it also introduces legal risks - especially Co-Employment Risk. In this article, we look at what Co-Employment is, why it is a risk for employers and how to mitigate it.  ## What is Co-Employment? **Co-employment** occurs when two or more companies share control over a worker and are jointly considered employers for legal and tax purposes.  In [contingent labor programs](https://www.conexisvmssoftware.com/contingent-workforce-vms), this often happens when: - A **staffing agency** supplies a worker, but the client company directs their day-to-day tasks. - An **independent contractor** is treated like a full-time employee - with fixed hours, specific workflows, or integration into daily operations. If these boundaries blur, courts, the IRS, or the Department of Labor may determine that **co-employment exists**, exposing your business to liability. ## Why Co-Employment is a Legal Risk for Employers The consequences of mismanaging co-employment can be serious.  If you’re not careful, co-employment can lead to expensive lawsuits, government audits, back taxes, and reputational damage.  - **Liability for Benefits**: If co-employment is determined, the company may be responsible for providing benefits such as health insurance, paid time off, or retirement plans. - **Tax Penalties**: [Misclassifying a worker](https://www.conexisvmssoftware.com/blog/what-is-a-contingent-worker-misclassification) as a contractor when they’re effectively functioning as an employee could lead to back taxes, interest, and penalties. - **Wage Claims**: Co-employed workers may bring claims for unpaid overtime, minimum wage violations, or improper termination. - **Harassment and Discrimination Liability**: Co-employment status means your company could be held liable for workplace violations - even if the worker was placed by an agency. - **Wrongful Termination or Immigration Issues**: If your company exerts too much control over hiring, firing, or day-to-day supervision, it may become entangled in legal disputes over terminations or immigration violations. ## How a VMS Helps Avoid Co-Employment Risk A [Vendor Management System (VMS)](https://www.conexisvmssoftware.com/what-is-a-vendor-management-system-vms) like Conexis provides the compliance framework you need to minimize co-employment exposure. Here’s how: ### 1 - Monitoring of Assignment Duration One of the simplest red flags for co-employment is how long a worker stays on assignment. Conexis enables the automated monitoring of tenure policies, tracks assignment start and end dates, flags overextensions, and prompts HR or procurement to reevaluate long-term needs. By managing tenure proactively, companies avoid creating the perception that temps are being treated like permanent employees. ### 2 - Independent Contractor Compliance and Verification Conexis supports IC vetting by integrating classification tools and workflows to verify that an IC meets legal criteria (based on IRS or Department of Labor tests). It can house documents proving IC status, such as business licenses, contracts, and insurance, and flag any missing or expired items. ### 3 - Worker Classification and Audit Trails All [contingent worker](https://www.conexisvmssoftware.com/blog/your-guide-to-understanding-the-different-types-of-contingent-workers) engagements should be fully documented. Conexis maintains an audit trail of contracts, classification justification & decisions, work scopes, and vendor responsibilities, providing legal protection in the event of a claim. ### 4 - Automated Workforce Compliance Monitoring Conexis automates compliance checks for background screenings, credential verification, onboarding documents, and contract deliverables. Whether you need to confirm that a contractor is legally allowed to work or that a healthcare temp has up-to-date certifications, your VMS ensures nothing slips through the cracks. ### 5 - Non-Compliance Alerts Automated alerts are your early warning system. Whether it’s a contract expiring, a missing insurance certificate, or an IC working outside their defined scope, Conexis flags these risks in real time - giving you the chance to fix issues before they escalate into legal liabilities. ## Protect Your Business from Co-Employment Risk In today’s flexible labor market, **co-employment risk is a reality - but it doesn’t have to be a liability**. Conexis VMS delivers the tools to manage compliance, reduce risk, and protect your business. ## Additional Reading on Contingent Workforce Risk - [How a VMS helps protect you from Candidate Fraud](https://www.conexisvmssoftware.com/blog/candidate-fraud-vms-prevention) - [Co-Employment Risk: How a VMS Shields you from Risk](https://www.conexisvmssoftware.com/blog/what-is-co-employment-risk-vms) - [Misclassification: A Critical Risk for Contingent Workforce Programs](https://www.conexisvmssoftware.com/blog/what-is-a-contingent-worker-misclassification) - [10 Ways a VMS helps reduce Contingent Workforce Compliance](https://www.conexisvmssoftware.com/blog/10-ways-a-vms-improves-compliance-risk-in-your-contingent-workforce) - [How to Identify the Hidden Risks in Your Contingent Workforce Program](https://www.conexisvmssoftware.com/blog/identifying-the-hidden-risks-in-your-contingent-workforce-program) - [How to Track Contingent Workforce Compliance Risk with a VMS](https://www.conexisvmssoftware.com/blog/how-to-track-contingent-workforce-compliance-with-a-vms-system) - [What is Contingent Workforce Compliance Risk?](https://www.conexisvmssoftware.com/blog/how-to-mitigate-contingent-workforce-compliance-risk) - [Is your Staffing Agency putting your company at risk?](https://www.conexisvmssoftware.com/blog/is-your-staffing-agency-putting-your-company-at-risk) - [The Benefits and Risks of Hiring Contingent Workers](https://www.conexisvmssoftware.com/blog/contingent-workforce-management-types-benefits-risks-best-practices) - [The Top 5 Contingent Workforce Risks and How to Manage them](https://www.conexisvmssoftware.com/blog/the-top-5-contingent-workforce-risks-and-how-to-manage-them) - [How a VMS keeps you compliant and audit-ready](https://www.conexisvmssoftware.com/blog/vendor-management-system-compliance) ## The Conexis VMS Difference Conexis VMS is an [award-winning](https://www.conexisvmssoftware.com/conexis-vms-awards-and-recognition) vendor management system built for organizations that want the power of enterprise software without the complexity or cost. Leveraging the latest technology, Conexis VMS delivers the expertise, reliability and security of enterprise systems, while offering the flexibility, user friendliness and tailored, personal service you require. Learn more about our [Company](https://www.conexisvmssoftware.com/company) and what makes [Conexis VMS different](https://www.conexisvmssoftware.com/best-vendor-management-system-conexis). ## Discover the Power of Conexis VMS Conexis VMS is trusted by staffing agencies, MSPs and leading organizations to modernize and manage their contingent workforce programs. Here's why organizations choose Conexis VMS: - [Modern VMS Technology](https://www.conexisvmssoftware.com/best-vendor-management-system-conexis) - Built on the latest AWS microservices architecture and Open API - [Fast Implementation](https://www.conexisvmssoftware.com/blog/how-do-they-do-it-how-conexis-launches-a-vms-in-weeks-not-months) - Get up and running in under a month, free setup and training included - [Fully Branded White-Label VMS](https://www.conexisvmssoftware.com/blog/how-do-they-do-it-how-conexis-delivers-fully-branded-white-label-vms) - Your Logo. Your Domain. Your Branded Communication - [Flexible Pricing](https://www.conexisvmssoftware.com/pricing) - No setup fees, with free implementation, training and account management - [Personal Attention](https://www.conexisvmssoftware.com/vms-nps-customer-satisfaction-adoption) - Experienced senior account management from implementation onward ## Switching Your VMS or Just Getting Started? We work with teams at every stage, from first-time buyers to companies replacing outdated platforms that can't keep up. Either way, we'll show you what a modern VMS looks like, up and running in under 30 days. | [![Take a self-guided tour of Conexis VMS ](https://no-cache.hubspot.com/cta/default/7617376/6617fad0-9168-4a45-b474-c96a34628641.png)](https://cta-redirect.hubspot.com/cta/redirect/7617376/6617fad0-9168-4a45-b474-c96a34628641) | [![Book a private consultation with Conexis VMS](https://no-cache.hubspot.com/cta/default/7617376/838fcdf1-1e6b-4f38-94ca-546b5c3f500a.png)](https://cta-redirect.hubspot.com/cta/redirect/7617376/838fcdf1-1e6b-4f38-94ca-546b5c3f500a) | [![Book a Demo with Conexis VMS](https://no-cache.hubspot.com/cta/default/7617376/18db2c62-a34a-4454-8010-c1bfc7f5e559.png)](https://cta-redirect.hubspot.com/cta/redirect/7617376/18db2c62-a34a-4454-8010-c1bfc7f5e559) | | --- | --- | --- |    [![VMS Risk | Compliance](https://no-cache.hubspot.com/cta/default/7617376/8142be4d-0aaf-42ec-99f1-6a4623e8ca15.png)](https://cta-redirect.hubspot.com/cta/redirect/7617376/8142be4d-0aaf-42ec-99f1-6a4623e8ca15)   ![Wayne Burgess](https://www.conexisvmssoftware.com/hubfs/Wayne100.png) #### Wayne Burgess Wayne Burgess is the Co-Founder of Conexis VMS, a technology company focused on helping organizations get control of their Contingent Workforce. ### Popular posts ![How Do They Do It? How Conexis Open APIs Deliver Fast VMS Integrations](https://www.conexisvmssoftware.com/hubfs/how%20do%20they%20do%20it-Conexis-VMS-Open%20api_%201200x627-44.jpg) ## [How Do They Do It? How Conexis Open APIs Deliver Fast VMS Integrations](https://www.conexisvmssoftware.com/blog/how-do-they-do-it-how-conexis-vms-open-apis-make-vms-integration-fast) [![read more](https://www.conexisvmssoftware.com/hubfs/6M%20Files/read-more.svg)Read More](https://www.conexisvmssoftware.com/blog/how-do-they-do-it-how-conexis-vms-open-apis-make-vms-integration-fast) 17 September 2026 ![How Do They Do It? How Conexis VMS Delivers a White-Label VMS](https://www.conexisvmssoftware.com/hubfs/1.%20MASTER%20MASTER%20Blog%20and%20Website%20Page%20IMAGES%202026/HOW%20DO%20THEY%20DO%20IT%20OPTIMIZED%201200/conexis-vms-white-label-vms-1200-627-60.jpg) ## [How Do They Do It? How Conexis VMS Delivers a White-Label VMS](https://www.conexisvmssoftware.com/blog/how-do-they-do-it-how-conexis-delivers-fully-branded-white-label-vms) [![read more](https://www.conexisvmssoftware.com/hubfs/6M%20Files/read-more.svg)Read More](https://www.conexisvmssoftware.com/blog/how-do-they-do-it-how-conexis-delivers-fully-branded-white-label-vms) 24 June 2026 ![How Do They Do It? How Conexis VMS Can Launch in Under 30 Days](https://www.conexisvmssoftware.com/hubfs/1.%20MASTER%20MASTER%20Blog%20and%20Website%20Page%20IMAGES%202026/HOW%20DO%20THEY%20DO%20IT%20OPTIMIZED%201200/conexis-vms-implementation-1200-627-59.jpg) ## [How Do They Do It? How Conexis VMS Can Launch in Under 30 Days](https://www.conexisvmssoftware.com/blog/how-do-they-do-it-how-conexis-launches-a-vms-in-weeks-not-months) [![read more](https://www.conexisvmssoftware.com/hubfs/6M%20Files/read-more.svg)Read More](https://www.conexisvmssoftware.com/blog/how-do-they-do-it-how-conexis-launches-a-vms-in-weeks-not-months) 1 June 2026 ### Subscribe to the Conexis Monthly Newsletter ![Conexis Logo - White](https://www.conexisvmssoftware.com/hubfs/CONEXIS%20LOGO/ConexisLogo%20Square-White-V2.svg "Conexis Logo - White") [![Conexis VMS Reviews](https://www.conexisvmssoftware.com/hubfs/www.conexisvmssoftware.png)](https://sourceforge.net/software/product/Conexis-VMS/) - [VMS BENEFITS](https://www.conexisvmssoftware.com/benefits-of-vendor-management-system) - [PRICING](https://www.conexisvmssoftware.com/pricing) - [COMPANY](https://www.conexisvmssoftware.com/company) - [CONTACT](https://www.conexisvmssoftware.com/contact) - [CONEXIS VMS](https://www.conexisvmssoftware.com/best-vendor-management-system-conexis) - [LEARN](https://www.conexisvmssoftware.com/vms-vendor-management-system-resources) - [TAKE A TOUR](https://www.conexisvmssoftware.com/self-guided-tour-of-conexis-vms-vendor-management-system-demo) - [BOOK A DEMO](https://www.conexisvmssoftware.com/book-a-demo) ![icon-map-marker](https://www.conexisvmssoftware.com/hubfs/6M%20Files/icon-map-marker.svg)**USA** 350 S NW Highway, Suite 300 Park Ridge, IL 60068 ![icon-map-marker](https://www.conexisvmssoftware.com/hubfs/6M%20Files/icon-map-marker.svg)**Canada** 100 King Street West, Suite 5600 Toronto, ON, M5X 1C9 ![phone-icon](https://www.conexisvmssoftware.com/hubfs/2021/Images/icon-phone.svg)[(312) 776-2006](tel:13127762006) ![SIA\_Corporate Member Logo](https://www.conexisvmssoftware.com/hs-fs/hubfs/SIA_CM_Member_2018%20copy.jpg?width=300&height=74&name=SIA_CM_Member_2018%20copy.jpg)   Copyright © 2026 Conexis VMS - All Rights Reserved. | [Privacy Policy](https://www.conexisvmssoftware.com/privacy-policy) ```json { "@context" : "http://schema.org/", "@type" : "BlogPosting", "author" : { "@type" : "Person", "name" : "Wayne Burgess" }, "dateModified" : "2026-09-03T2:51:35 AM", "datePublished" : "2026-08-04 04:00:00", "description" : "Learn what co-employment risk is, and how a Vendor Management System (VMS) reduce risk and liability.", "headline" : "How a VMS Protects you from Co-Employment Risk", "image" : { "@type" : "ImageObject", "height" : 40, "url" : "https://www.conexisvmssoftware.com/hubfs/conexis-favicon.png", "width" : 40 }, "mainEntityOfPage" : { "@id" : "https://www.conexisvmssoftware.com/blog/what-is-co-employment-risk-vms", "@type" : "WebPage" }, "name" : "How a VMS Protects you from Co-Employment Risk", "publisher" : { "@type" : "Organization", "logo" : { "@type" : "ImageObject", "height" : 73, "url" : "https://www.conexisvmssoftware.com/hubfs/Conexis%20Logo%2001-1.png", "width" : 80 }, "name" : "Conexis" } } ``` ```json { "@context" : "https://schema.org", "@type" : "Organization", "contactPoint" : { "@type" : "ContactPoint", "contactType" : "sales", "telephone" : "+1-647-370-8987" }, "name" : "Conexis", "url" : "https://www.conexisvmssoftware.com/" } ```