I-9 Compliance: The Mistakes Employers Make Most Often

Why I-9 Compliance Gets Overlooked Until It's a Crisis

I-9 compliance is one component of a broader HR compliance checklist every small business employer should have covered.

Every employer in the United States is required to verify that new hires are authorized to work. The I-9 form has been around since 1986. And yet I-9 errors are among the most consistently found compliance violations when employers face government audits — because the requirements are more specific than they look, and because the verification process is typically handled by whoever onboards new employees rather than by HR professionals who know the rules.

The penalties have teeth. Civil fines for paperwork violations range from $272 to $2,701 per Form I-9. Knowingly employing unauthorized workers starts at $676 per worker and can exceed $27,000 per worker for repeat violations. And in an environment of increased immigration enforcement, the probability of an audit is higher than it has been in years.

For fractional HR consultants, this is an area where a two-hour I-9 audit can prevent five figures of liability.

Section 1: What Employees Get Wrong

Section 1 is completed by the employee no later than the first day of employment. Common errors:

Incorrect status selection. Employees who are US citizens sometimes check the wrong status. Employees who are lawful permanent residents sometimes leave the A-Number field blank. Employees who are authorized aliens sometimes fail to provide the required expiration date.

Missing signatures. Section 1 requires the employee's signature and date. If someone else assisted the employee in completing the form (a preparer or translator), that section must also be completed and signed. Missing preparer/translator certifications are a frequent finding.

Form completion before job offer. Employees should not complete Section 1 before accepting a job offer. Pre-completing Section 1 in anticipation of a hire raises legal issues under immigration law.

Section 2: What Employers Get Wrong

Section 2 is the employer's responsibility. It must be completed within three business days of the employee's first day of work. This is where most I-9 violations occur.

Failure to examine original documents. Section 2 requires physical examination of original documents. The employer (or authorized representative) must physically examine the documents in the employee's presence. Receiving scanned or faxed copies does not satisfy this requirement under standard I-9 procedures.

There is an exception: employers enrolled in E-Verify may use the temporary remote hire alternative examination procedure, which allowed remote document review during the COVID-19 period and has been extended with specific requirements. Employers not enrolled in E-Verify cannot use this.

Accepting expired documents. List A documents must be unexpired. Some acceptable documents don't appear to have expiration dates but are no longer acceptable — knowing which documents are currently on the acceptable lists is necessary.

Listing document information incorrectly. The document title, issuing authority, document number, and expiration date must be accurately recorded. Transcription errors are common and technically constitute paperwork violations.

Late completion. Section 2 must be completed within three business days of the first day of work, not three business days after the I-9 is received. Employers who store blank I-9s in onboarding packets and complete them at varying times often have timing violations throughout their workforce.

Missing certifications. The employer certification in Section 2 requires a signature, title, date, and employer information. Missing or incomplete certifications are a common finding.

Retention and Storage Errors

I-9 forms must be retained for three years from the date of hire or one year after employment ends, whichever is later. After the retention period, forms should be systematically destroyed — not merely discarded.

Common retention errors:

• ✦Retaining I-9s in the employee's personnel file (permitted but not recommended — it exposes unrelated information during audits)
• ✦Failing to maintain I-9s at all for employees who terminate quickly
• ✦Retaining forms indefinitely rather than destroying them after the retention period, which creates unnecessary audit exposure

Remote Hires

Remote hiring has significantly complicated I-9 compliance. For employers not using E-Verify's remote hire alternative:

The standard approach is to designate an authorized representative — a notary public, attorney, HR professional at a remote location, or any responsible person — to complete Section 2 on the employer's behalf. The authorized representative has the same liability as the employer for any violations in completing the form.

Clear instructions to remote authorized representatives, a defined process, and follow-up to ensure timely return of completed forms are essential. Many remote hire I-9 violations stem from the authorized representative completing the form incorrectly because they weren't given adequate guidance.

The Audit Process: Know What to Expect

ICE and DHS can issue a Notice of Inspection requiring production of I-9 forms within 3 business days. Employers have no practical basis to refuse. During an audit, violations are categorized as technical (procedurally correctable) or substantive.

Technical violations — missing information that can be corrected on a current form — can often be corrected before or during the audit. Substantive violations, including missing forms and accepting unacceptable documents, typically result in fines.

For your clients: An I-9 compliance review is the fastest and most cost-effective compliance audit you can conduct for a new client. A review of existing I-9s against the current standards, identification of correctable errors, correction of technical violations, and documentation of the review creates a reasonable good-faith compliance record. It takes a few hours for most small employers and is worth significantly more than that in risk reduction.

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