What Employers Need to Know About I-9 Compliance
With heightened immigration enforcement under the Trump administration, employers must be more vigilant than ever in ensuring compliance with federal work authorization requirements. The Form I-9 plays a central role in verifying employees’ work eligibility, and businesses that fail to follow proper procedures risk significant fines and penalties.
The responsibility of hiring comes with more than just finding the right candidate—it means ensuring every new employee is legally authorized to work in the U.S. Failing to comply with federal employment verification laws can lead to costly penalties, legal trouble, and reputational damage.
At the center of this process is Form I-9, a document every employer must complete for each new hire. Immigration and Customs Enforcement (ICE) has significantly increased audits in recent years, making it more important than ever for businesses to proactively review their compliance procedures. Even a small paperwork mistake can lead to fines, and hiring an employee without proper work authorization can bring severe consequences.
Whether you’re a small business owner or part of a corporate HR team, understanding I-9 compliance, E-Verify, and work authorization rules will help you avoid legal pitfalls. This guide breaks down the key requirements, common challenges, and best practices to keep your company compliant.
Understanding the Basics of I-9 Compliance
Under the Immigration Reform and Control Act of 1986 (IRCA), every U.S. employer must verify the identity and work authorization of all employees hired after November 6, 1986—regardless of citizenship or immigration status.
What is Form I-9?
Form I-9 is a federal employment verification form that ensures an employee is legally authorized to work in the U.S. It consists of three sections:
- Section 1 (Employee’s Responsibility) – The employee fills this out on or before their first day of work, confirming their identity and work eligibility.
- Section 2 (Employer’s Responsibility) – The employer must physically verify documents proving identity and work authorization within three business days of the employee’s start date.
- Section 3 (Reverification) – Used only if an employee’s work authorization expires (does not apply to U.S. citizens or permanent residents).
Failing to complete any of these sections properly—whether by missing signatures, incorrect dates, or failing to verify documents—can lead to legal penalties.
When Must the I-9 Be Completed?
Employers must follow strict timelines when completing Form I-9:
- Section 1 (Employee Information and Attestation) must be completed by the employee no later than their first day of work.
- Section 2 (Employer Review and Verification) must be completed by the employer within three business days of the employee’s start date. The employer must review the employee’s documents in person (or remotely through an authorized alternative procedure, if applicable).
- Section 3 (Reverification and Rehires) must be completed when an employee’s work authorization expires and must be updated accordingly.
Failure to meet these deadlines can result in fines and penalties, even if the employee is legally authorized to work.
The Role of E-Verify in Employment Verification
What is E-Verify?
In addition to the paper-based I-9 process, many employers participate in E-Verify, an online system that allows employers to confirm an employee’s work authorization by comparing Form I-9 information against federal government databases.. While E-Verify is voluntary at the federal level, some states require its use for certain industries or government contractors.
Is E-Verify Required?
At the federal level, participation is voluntary—except for some government contractors. Certain states require businesses in specific industries (such as construction or government-related work) to use E-Verify. Even if not required, using E-Verify can provide an extra layer of compliance to reduce risk.
How Does E-Verify Work?
The employer submits I-9 details to the E-Verify system within three business days of the employee’s start date. The system checks records from the Department of Homeland Security (DHS) and Social Security Administration (SSA).
If a discrepancy arises, the employer must promptly notify the employee and follow proper procedures. While E-Verify helps ensure compliance, it does not replace Form I-9, which must still be completed for all employees.
Employers using E-Verify must:
- Submit employee information within three business days of the hire date.
- Follow up on any Tentative Nonconfirmation (TNC) notices immediately.
- Avoid discriminatory practices by applying E-Verify consistently for all new hires.
Although E-Verify provides an additional layer of compliance, it does not replace the need for proper I-9 completion and recordkeeping.
Best Practices for I-9 Compliance and Reverification
1. Conduct Regular Internal Audits
Routine audits help identify and correct errors before ICE conducts an inspection. Employers should review I-9 records for:
- Missing or incorrect information (e.g., missing signatures, incorrect document expiration dates).
- Expired work authorization for employees with temporary status.
- Forms that were not completed within the required timeframe.
2. Track Work Authorization Expiration Dates
For employees on temporary work visas or Employment Authorization Documents (EADs), employers must track expiration dates and reverify work authorization before it expires. This applies to:
- H-1B, L-1, and O-1 employees who have received extensions or amendments.
- F-1 students on Optional Practical Training (OPT) who transition to STEM extensions or new visa categories.
- Temporary Protected Status (TPS) or DACA beneficiaries with renewed EADs.
Employers should set up automated reminders to avoid lapses in work authorization, as continued employment after expiration could lead to noncompliance penalties.
3. Ensure I-9 Records Are Updated with Immigration Filings
Employers who sponsor employees for work visas or green cards must ensure that I-9 records align with immigration petitions. When an employee receives a new or extended work authorization, employers must update Section 3 to reflect the new information.
For example, if an H-1B worker changes employers or extends their stay, the employer must ensure that the I-9 form reflects the latest approval notice or portability provisions under AC21. Similarly, if an employee adjusts from an F-1 OPT EAD to an H-1B, this change must be documented properly.
4. Maintain Proper Recordkeeping and Storage
Employers must retain I-9 forms for at least three years after the employee’s hire date or one year after termination, whichever is later. I-9s can be stored:
- As paper copies in a secure location.
- Electronically, provided the system meets federal recordkeeping requirements.
It is best practice to store I-9 forms separately from personnel files to allow for easier auditing and compliance checks.
5. Be Prepared for ICE Audits and Site Visits
If ICE initiates an I-9 audit, businesses typically receive a Notice of Inspection (NOI) and must provide documentation within three business days. Employers should:
- Designate a compliance officer to handle ICE audits.
- Have a legal representative review all I-9 records before submission.
- Ensure only required documents are provided—do not over-disclose information.
Employers should also be cautious about how they handle employee terminations or suspensions related to I-9 discrepancies. Any action taken must comply with anti-discrimination provisions of the Immigration and Nationality Act (INA).
Consequences of I-9 Noncompliance
Failure to comply with I-9 requirements can lead to:
- Civil penalties ranging from $272 to $27,018 per violation for paperwork errors.
- Fines of up to $22,363 per unauthorized worker for knowingly employing individuals without proper work authorization.
- Criminal charges in cases of willful violations or fraud.
ICE inspections have increased under the Trump administration, leading to more penalties, debarments from government contracts, and, in some cases, arrests for employers engaging in illegal hiring practices.
Final Thoughts: A Proactive Compliance Strategy Is Key
The enforcement landscape for I-9 compliance has become increasingly strict, making it crucial for businesses to take a proactive approach. Employers should not wait for an ICE audit to uncover errors but instead implement regular audits, training programs, and compliance reviews to ensure all I-9 records are in order.
By staying ahead of enforcement actions and following best practices, businesses can minimize risks, protect their workforce, and remain compliant with federal immigration laws.
