June 10, 2025

Preparing for an I-9 Audit: What Employers Need to Know

Immigration compliance continues to be a critical area of focus for employers and their workforces. Although Form I-9 is a fundamental part of the onboarding process, it is often completed, filed away, and never revisited. Despite its apparent simplicity, the Form I-9 process is rife with opportunities for errors—ranging from delayed completion and inconsistent or missing documentation to improper retention practices. These common missteps can result in significant penalties and legal exposure, including fines for knowingly hiring unauthorized workers, failing to comply with document requirements, or improperly verifying employment authorization documents.

Given these risks, employers need to stay informed about the evolving enforcement landscape. While the current administration has signaled a renewed focus on immigration compliance, including Form I-9 enforcement, audit activity has varied significantly in recent years. Form I-9 audits were deprioritized during the previous administration, resulting in a notable decline in enforcement actions. Regardless of shifting federal priorities, we have long viewed internal Form I-9 audits as a best practice and an essential component of a sound compliance program. Employers should take proactive steps to ensure their HR processes are current and that Form I-9s are properly completed, maintained, and retained. As the saying goes, an ounce of prevention is worth a pound of cure—and when it comes to Form I-9 compliance, that principle continues to hold true.

Understanding the Critical Role of Form I-9

Form I-9, also known as the Employment Eligibility Verification form, plays a critical role in ensuring a legal workforce. Mandated by the U.S. Department of Homeland Security (DHS), the form verifies both the identity and employment authorization documents of every individual hired to work in the United States. The current version of the Form I-9 was issued on August 1, 2023, and is set to expire on May 31, 2027—marked clearly with the expiration date on the form.

Worksite enforcement efforts—particularly through audits conducted by U.S. Immigration and Customs Enforcement (ICE)—commonly focus on Form I-9 compliance. During these audits, ICE reviews each form to confirm the validity of employment authorization documents and immigration or citizenship status. Unauthorized employment can occur when individuals without valid work authorization are hired, whether because of expired documentation or a lack of proper verification. Staying compliant with Form I-9 requirements and the form instructions is essential to maintaining a legally authorized workforce and avoiding these risks.

Importantly, Form I-9 is far more than an administrative formality—it is a legal obligation under the Immigration Reform and Control Act of 1986 (IRCA). Every employer, regardless of size, is required to complete the form and retain a Form I-9 for each individual hired to work in the United States on or after November 6, 1986. Failure to comply with these requirements can subject employers to audits, substantial fines, and other enforcement actions.

Key Form I-9 Compliance Requirements:

• Section 1: Must be completed by the employee on or before their first day of employment.
• Section 2: Must be completed by the employer within three business days of the employee’s start date.
• Document Verification: The individual who performs the physical examination of the employee’s identity and employment authorization documents must be the same person who completes Section 2.
• Retention Requirements: Employers must retain Form I-9s for all current employees. For former employees, forms must be kept for either three years from the date of hire or one year after termination—whichever is later. All forms must be securely stored and readily accessible.

Consequences of Non-Compliance

Failing to comply with Form I-9 requirements can carry significant consequences, both financial and operational. Violations generally fall into two categories: technical and substantive.

Technical violations often involve minor errors or omissions, such as missing dates, incomplete fields, or document numbers. While these may seem insignificant, they can escalate into substantive violations if left uncorrected.

Substantive violations are more serious and include:

• Failure to inspect acceptable documents and complete the Form I-9 within three business days of the employee’s start date
• Failure to sign the Form I-9
• Failure to ensure the employee attests to their citizenship or immigration status
• Failure to review and verify acceptable documents
• Failure to reverify employees whose work authorization is expiring—especially near the expiration date of their employment eligibility

Employers should not underestimate the impact of these violations. Even if a business hires only authorized workers, it can still face substantial fines for paperwork errors—up to $2,861 per violation per form for substantive violations or uncorrected technical violations. Penalties for knowingly employing unauthorized workers can exceed $28,619 per violation.

Moreover, an ill-timed Form I-9 audit by U.S. Immigration and Customs Enforcement (ICE) can disrupt daily operations, damage reputations, and—depending on the severity of the violations—result in the suspension or revocation of business licenses.

ICE has significantly increased its enforcement activity in recent months. Worksite inspections often occur with little or no advance notice. If an employer receives a Notice of Inspection (NOI), they are legally required to produce their Form I-9 records within three business days. Employers unable to present compliant and complete forms during that time period may face additional penalties and enforcement action.

Understanding E-Verify for Remote Employees

E-Verify is a free, web-based program administered by the Department of Homeland Security (DHS) through U.S. Citizenship and Immigration Services (USCIS), in partnership with the Social Security Administration (SSA). After completing the Form I-9, employers can enter the employee’s information into E-Verify, which cross-checks it against federal databases to confirm employment authorization.

For employers who hire remote employees, E-Verify is not optional—it is a mandatory step to comply with federal remote hiring requirements. Because remote hires do not undergo in-person document verification, E-Verify serves as a critical tool to verify employment eligibility electronically and help mitigate risks of unauthorized work. Additionally, employers who qualify for the Department of Homeland Security (DHS) authorized alternative procedure may conduct remote examination of acceptable documents through E-Verify, further simplifying and streamlining the remote hiring process.

To comply with remote hiring rules, employers must:

• Properly complete Section 1 of Form I-9 on or before the employee’s first day
• Collect and examine acceptable documents remotely using authorized representatives during the physical examination process
• Enter the employee’s information into E-Verify within three business days of their start date
• Promptly respond to any Tentative Nonconfirmations (TNCs) generated by the system

Importantly, E-Verify does not replace the Form I-9 requirement. Employers remain responsible for completing, retaining, and maintaining the Form I-9 for all new hires, whether remote or in-person.

Employers must use E-Verify consistently for all remote hires to avoid discriminatory practices based on citizenship, immigration status, or national origin. Timely and proper handling of E-Verify and Form I-9 requirements ensures compliance and reduces the risk of costly audits and penalties.

The Benefits of Electronic Form I-9 Systems

Transitioning from paper-based Form I-9 processes to an electronic Form I-9 system offers numerous advantages that can significantly enhance compliance and operational efficiency. Electronic systems help employers control access to sensitive forms, reduce technical errors, maintain detailed audit trails, and streamline recordkeeping—all critical factors in meeting federal requirements.

Many electronic platforms integrate seamlessly with E-Verify, enabling employers to verify new hires’ employment authorization quickly and accurately. This integration is particularly valuable for organizations with decentralized hiring teams or multiple locations, allowing for consistent compliance practices and centralized document management. In the event of an audit, electronic systems provide rapid access to completed forms, minimizing disruption and risk.

Electronic Form I-9 solutions often include built-in error-checking features that alert users to missing information, improper formatting, or upcoming re-verification deadlines—helping prevent costly mistakes before they happen.

However, not all electronic Form I-9 systems are created equal. Employers must ensure that their chosen platform complies with the standards outlined in the joint DOJ Civil Rights Division and U.S. Immigration and Customs Enforcement (ICE) Fact Sheet on avoiding discrimination and I-9 violations. Essential features include securely stored data, support for electronic signatures, and a reliable, auditable history of form changes.

Ultimately, utilizing an electronic Form I-9 system paired with thorough employee training and oversight can help organizations maintain compliant records, improve accuracy, and safeguard sensitive information—all while reducing administrative burdens associated with traditional paper forms.

Why Employers Must Conduct Internal Audits

Internal audits are one of the most effective tools employers have to protect their businesses from costly penalties, legal exposure, and operational disruption. While not every employer will face an ICE inspection, audits are a crucial proactive measure to identify and correct errors—such as incomplete forms, missing signatures, invalid or expired employment authorization documents, and improper retention—long before they become compliance violations.

ICE audits often begin with very short notice, requiring employers to produce accurate and complete Form I-9 records within three business days. Without thorough internal reviews, employers risk missing critical mistakes that can result in civil fines for paperwork errors, criminal penalties for knowingly hiring unauthorized workers, loss of federal contracts, or even worksite raids in severe cases.

Beyond avoiding penalties, internal audits empower organizations to maintain accurate, compliant records, reducing stress and disruption if and when an external audit occurs. Audits also help ensure that all employees, including remote hires, are properly verified and that authorized representatives follow the correct procedures during the physical examination of documents. Moreover, well-documented audits—with clear records of corrections and no backdating—demonstrate a good-faith effort to comply, which can be critical in mitigating penalties.

In short, routine internal audits are not just about compliance—they are about risk management, operational preparedness, and protecting your organization’s reputation. By prioritizing these audits and ensuring staff are trained and procedures are followed according to the form instructions, employers can avoid costly fines, legal challenges, and reputational damage.

Remember, strong compliance is built on consistent attention to detail because no one wants to discover a costly mistake after an unexpected knock on the door.