“Co-employment” arrangements can take many forms. As an employer, you continue to be responsible for compliance with Form I-9 requirements.

If the arrangement into which you have entered is one where an employer-employee relationship also exists between the PEO and the employee (e.g., the employee performs labor or services for the PEO), the PEO would be considered an employer for Form I-9 purposes and:

1. The PEO may rely upon the previously completed Form I-9 at the time of initial hire for each employee continuing employment as a co-employee of you and the PEO, or
2. The PEO may choose to complete new Forms I-9 at the time of co-employment.

If more employees are subsequently hired, only one Form I-9 must be completed by either the PEO or the client. However, both you and your PEO are responsible for complying with Form I-9 requirements, and DHS may impose penalties on either party for failure to do so. Penalties for verification violations, if any, may vary depending on:

1. A party’s control or lack of control over the Form I-9 process;
2. The size of the business;
3. Good faith in complying with Form I-9 requirements;
4. The seriousness of the party’s violation;
5. Whether or not the party was an unauthorized alien;
6. The history of the party’s previous violations; and
7. Other relevant factors.

Source: M-274, Handbook for Employers, Instructions for Completing Form I-9 (Employment Eligibility Verification Form); http://www.uscis.gov/files/form/m-274.pdf.