“I have now had two small business clients that did not have I-9 forms for their employees. They were not aware of I-9 forms, or that they needed to have them. In both cases, the company had been in business over 25 years and employed over 20 employees (and many more over the years). This is a common challenge: small and medium-sized businesses simply don’t know what they don’t know… and it can get them into trouble. In this case, the risks are substantial and could be quite costly… and enforcement has been ramping up in recent months.”
– Carolyn Ross, Owner, Ross Insight Solutions
The Reality of I-9 Compliance Gaps
I-9 compliance unawareness is surprisingly common. Even established businesses operating for decades often have no I-9 documentation whatsoever. This oversight isn’t just an administrative hiccup—it’s a significant legal vulnerability.
So why does this happen so often? In some cases, they are not aware of the requirement. Also, according to a recent survey of small business owners by the Society for Human Resource Management (SHRM), over 60% reported challenges with maintaining proper I-9 procedures and documentation. This uncertainty creates substantial risk exposure, especially as enforcement efforts intensify.
Let’s dive into what you really need to know about I-9 forms, compliance requirements, and practical steps to protect your business from potentially devastating penalties.
What Is an I-9 Form and Why It Matters
“Compliance isn’t just about following the rules. It’s about protecting your business and your people.”
– Carolyn Ross, Ross Insight Solutions
The I-9 form is used to verify that employees are legally authorized to work in the U.S. This requirement applies to all employees—citizens and non-citizens alike.
Here’s a common misconception I hear all the time: That I-9 forms relate only to immigration or foreign workers. Not true! Every employee must complete this form—regardless of citizenship status. Yes, that means your nephew who works part-time in the summer needs one too.
Think of it as your paper shield. The form serves as verification that you’ve checked an employee’s identity and work authorization documents. It’s required by the Immigration Reform and Control Act of 1986 (IRCA).
Key Requirements for Employers
So what exactly are you on the hook for? Every employer must:
- Complete and retain an I-9 form for each employee
- Verify the identity and employment authorization documents of each employee
- Keep I-9 forms on file for specific periods
- Present forms for inspection when requested by government officials
Sound overwhelming? You’re not alone. A 2022 Gallup workplace compliance study found that documentation management ranks among the top compliance challenges for approximately 45% of small businesses. This highlights the widespread nature of this issue.
But don’t worry—I’m going to break this down into manageable steps.
Completing I-9 Forms Correctly
Let’s get practical. Accuracy matters—a lot. The I-9 form has three sections that must be completed properly and timely. Miss one detail, and you could be facing penalties:
Section 1: Employee Information and Attestation
- Must be completed and signed by the employee no later than their first day of employment
- Employees must attest to their citizenship or immigration status
- Employee must sign and date the form
Section 2: Employer Review and Verification
- Must be completed and signed by the employer within 3 business days of the employee’s first day
- Requires physical examination of original documents (not copies)
- Employer must record document information in appropriate fields
If the employee does not comply with providing the required documentation within the necessary timeframes, employers cannot permit them to continue to work. While companies are hesitant to suspend or terminate someone, they sometimes have no other choice. [If you find yourself in this situation, please reach out to see how we can help.]
Section 3: Reverification and Rehires
- Used for rehired employees (if within 3 years of original I-9)
- Required for reverifying expired work authorization
- Must be completed before work authorization expires
Common Mistakes to Avoid
Want to guess what I see most often when reviewing clients’ I-9 forms? These errors pop up again and again:
- Missing signatures or dates – this is the #1 issue!
- Incomplete sections – especially those pesky document numbers and expiration dates
- Accepting improper documents – no, a Social Security card alone isn’t enough
- Not making corrections properly – scribbling out errors makes things worse
- Failing to reverify when necessary – yes, you need calendar reminders for these
- Reverification is only necessary when the employee has presented document(s) that will expire. If this is the case, then document(s) should be reverified before the original document(s) expire.
I’m not exaggerating when I tell you that, according to Department of Homeland Security data, a significant percentage of audited I-9 forms contain at least one error or omission. Each mistake creates potential liability.
And trust me, those little mistakes can add up to big problems.
Storage and Retention Requirements
Here’s something many employers miss: The I-9 form must be stored securely, separate from personnel files. Why? This practice helps maintain privacy and streamlines the process during potential audits.
So how long do you need to keep these forms? Longer than you might think:
- For current employees: Keep I-9 forms for the entire period of employment
- For terminated employees: Keep for either 3 years after the hire date OR 1 year after termination—whichever is later
My advice? Implement a secure, organized system for I-9 storage and set calendar reminders for proper destruction dates. Your future self will thank you when that audit notice arrives.
Increasing Enforcement and Serious Consequences
Let me be blunt: DHS (Department of Homeland Security) and ICE (Immigration and Customs Enforcement) have intensified workplace enforcement efforts. Inspections can happen with minimal notice—sometimes as little as three days. And they’re happening more frequently than ever before.
Financial Penalties
The financial impact of non-compliance is severe—and it might shock you:
- $288 to $2,861 per missing or incorrect form
- $716 to $28,619 for knowingly employing unauthorized individuals
Do the math. If you have 20 employees and no I-9 forms, you’re looking at potential penalties starting at $5,760 and potentially exceeding $50,000. A recent study by immigration compliance experts revealed that small businesses frequently face penalties averaging over $10,000 in I-9 enforcement actions. For many businesses, these penalties can represent a catastrophic financial blow.
Think that’s not going to happen to your business? Think again.
Criminal Penalties
Beyond financial penalties, willful violations can result in:
- Criminal charges for owners and managers
- Debarment from government contracts
- Damage to business reputation
Immediate Steps for Legal Compliance
Ready for some good news? You can fix this situation—starting today. Take these actions now to protect your business:
1. Designate an I-9 Compliance Person
You need someone who owns this process. Assign a responsible person to:
- Learn proper I-9 procedures (it’s not rocket science, but it does require attention to detail)
- Stay current on requirement changes
- Train others as needed
- Oversee form completion
This designated person becomes your first line of defense against I-9 compliance issues.
2. Conduct an I-9 Audit
Don’t wait for the government to find your mistakes. Review your existing I-9 forms for:
- Completeness
- Accuracy
- Proper documentation
- Timely completion
Are some employees’ I-9 forms missing? That’s ok. For anyone hired on or after November 6, 1986:
– the employee and employer should complete the form
– the employee’s documentation should be verified
– and the form should be signed and dated with the current date.
Found errors? Don’t panic. Correct existing errors using proper correction procedures:
- Draw a line through incorrect information
- Enter the correct information
- Initial and date the correction
- Add a memo explaining the correction if needed
And please—don’t use white-out! That’s an immediate red flag to auditors.
The objective is not to hide that an I-9 form hadn’t been done or that errors had been made, but to remedy the deficiency as soon as possible.
3. Implement a Consistent Process
Consistency is your best friend when it comes to compliance. Create a standardized procedure for:
- Providing the I-9 form to new hires – do this with the offer letter, not on day one
- Explaining documentation requirements clearly – a simple checklist works wonders
- Reviewing documents in person – yes, you must physically see the documents; no, you should not keep copies (view it, verify its accuracy, then sign off on that review on the I-9 form… but don’t copy the documents
- Completing the employer section properly – within those crucial three business days
- Storing completed forms securely – remember—separate from personnel files
- Tracking reverification deadlines – set those calendar reminders!
The goal here is to make I-9 compliance automatic—just another routine part of your onboarding process.
4. Develop a Response Plan for Government Visits
A 2025 SHRM poll found that over half (52%) of HR professionals felt that their organization was not prepared for an ICE raid.
Be prepared for ICE or DHS inspections by:
- Designating who will interact with officials
- Understanding what to provide and what requires a warrant
- Training staff on proper response procedures
- Having legal counsel contact information readily available
Supporting Immigrant Employees
If your workforce includes foreign-born employees, consider these additional steps:
Know Your Obligations
Employers must:
- Treat all employees equally regardless of national origin
- Avoid making assumptions about work authorization based on appearance or accent
- Not retaliate against employees who assert their rights
Provide Resources
Consider:
- Sharing information about legal assistance programs
- Offering translation services for important documents
- Connecting employees with community resources
Prepare for Potential Enforcement Actions
Ensure employees know:
- Their right to remain silent
- Their right to speak with an attorney
- Not to sign documents they don’t understand
- To carry their work authorization documents with them
Final Thoughts: Proactive Compliance Protects Your Business
“I-9/immigration is just one of MANY compliance related areas that can get businesses into ‘hot water.'”
– Carolyn Ross, Ross Insight Solutions
The complexity of immigration and work authorization requirements shouldn’t prevent small businesses from achieving full compliance. Taking proactive steps now saves significant headaches and potential financial disaster later.
The most successful approach combines:
- Clear understanding of requirements (know what you need to do)
- Consistent implementation of processes (do it the same way every time)
- Regular audits of existing documentation (check your work)
- Preparation for potential enforcement actions (hope for the best, prepare for the rest)
By treating I-9 compliance as a fundamental business practice rather than an administrative burden, you protect your business while maintaining a legally compliant workforce. It’s not just about avoiding fines—it’s about running your business with integrity and confidence.
Need help implementing these practices? Reach out to RIS for assistance with I-9/immigration requirements and other compliance needs.
Legal Disclaimer:
The information provided in this newsletter is for general informational purposes only and is not intended to be legal advice. While we strive to ensure that the information provided is accurate and up to date, it should not be considered comprehensive or a substitute for professional legal advice. No action should be taken based solely on the information in this newsletter without consulting a qualified professional. We disclaim all liability for any actions taken or not taken based on the contents of this newsletter. If you have specific legal questions, you are encouraged to consult a licensed attorney.
