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Co-employment relationships are primarily governed by specific agreements between staffing firms and clients. This is because these agreements outline the roles, responsibilities, and obligations of each party in the staffing arrangement. These documents typically specify the terms of employment, including how workers will be hired, supervised, and compensated, helping to delineate the relationship between the staffing agency and the client company.

The existence of a well-defined agreement is crucial for managing liability, compliance with labor laws, and ensuring that both parties understand their responsibilities regarding the employees placed at the client’s site. These agreements can also address issues such as benefits, termination procedures, and the rights of the workers involved, thus providing a framework that clarifies the relationship and minimizes the risk of disputes.

In contrast, while state employment laws, client needs, and industry standards may influence the nature of the co-employment relationship, they do not govern it as directly as the agreements between the staffing firm and client do. State employment laws can vary significantly and may only apply to certain aspects of the relationship, and client needs are generally more focused on operational outcomes rather than regulatory compliance. Meanwhile, industry standards validate practices but do not have the same contractual authority as specific agreements.