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Co-employment refers to a legal relationship in which two distinct entities share responsibilities and obligations related to the same employee. This typically occurs in situations involving staffing agencies and client companies, where both parties have a role in managing the employee's employment relationship. For example, a staffing agency may be responsible for payroll and benefits, while the client company directs the employee's work and monitors performance.

This concept is crucial as it can affect liability for labor practices, adherence to employment laws, and the overall management of employee rights and obligations. Understanding co-employment is vital for staffing professionals, as they need to navigate the complexities of such arrangements to ensure compliance and protect both the agencies and clients.

Other options do not accurately define co-employment. Having two employers does not encompass the shared responsibilities and legal implications, while simply sharing resources does not capture the essence of the employment relationship. Lastly, outsourcing to foreign countries is unrelated to the principles of co-employment.