Executive Summary
| Key Learning | What Leaders Gain | Why It Matters |
|---|---|---|
| 1. Awareness of Legal & Financial Risks | Understanding the scale of penalties (fines, criminal charges, license loss) tied to I-9 violations | Helps leaders see compliance as a strategic risk, not just an HR formality |
| 2. Clarity on Common Compliance Pitfalls | Recognizing frequent mistakes like missing forms, blank fields, or incorrect dates | Enables leaders to identify vulnerabilities in their own organization before audits |
| 3. Proactive Solutions for Protection | Knowing that self-audits and third-party reviews can prevent costly penalties | Empowers leaders to take preventative action, safeguard reputation, and protect the bottom line |
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The Trump administration has made cracking down on illegal immigration a centerpiece of its second-term agenda, with highly publicized enforcement actions taking place across the nation. For businesses, this focus means that the potential for an I-9 investigation is heightened. The forms used to verify that employers have checked the identity and employment eligibility of their workers are subject to government review at any time, with no set schedule on when an audit might be required.
The risks to employers are not confined to penalties for knowingly employing an unauthorized worker, which can result in steep fines or even criminal charges. Paperwork errors on the form can also prompt fines that may rapidly add up from past patterns of inaccurate compliance. Rather than waiting and worrying about what the government might turn up in an audit—and how much it will cost—many businesses are conducting self-audits, allowing them to remediate problems before an official audit looms.
The I-9 and Common Errors
Since 1986, employers have been required to verify that every person they hire for paid employment in the U.S. is legally authorized to work here, with a properly completed I-9 (Employment Eligibility Verification) form. The employee must fill out Section 1 of the form when they start work, and the employer must fill out Section 2 within 3 days of the employee’s start date. The employer is also responsible for retaining the completed Form I-9 for every current employee; for former employees, they must retain I-9s for 3 years after their start date or 1 year after their last day, whichever is later.
Though the basic form is only one page, there are many mistakes that can impact compliance. The most obvious is missing forms, but even completed forms can have errors such as:
- Incorrect hire dates
- Missing signatures
- Fields left blank
- Wrong status marked for foreign national
While employers may once have overlooked I-9 compliance, the threat of an unanticipated government audit has many thinking twice, with good reason.
Fines for paperwork violations—errors made by employers acting in good faith if not with perfect accuracy—can range from $288 to $2,861 per violation. Much higher penalties apply if an employer is found to be knowingly hiring unauthorized workers. For a first offense these can be $716 to $5,724 per each person hired without work authorization. A second offense can incur a fine of $5,724 to $14,308 per person, and a third offense can cost from $8,586 and $28,619 per person. Businesses also risk losing their business licenses in the event of an audit if they have a pattern of I-9 violations.
Further, while most employers can voluntarily use E-Verify to check employee work authorization, employers in certain states are legally required to use the system. Businesses that contract with the federal government are also mandated to use E-Verify for new hires and sometimes for existing employees assigned to the contract. Compliance failures can result in civil penalties, the loss of government contracts, and revocation of licenses or permits.
When and How to Conduct I-9 Self-Audits
If your business has not audited its I-9 records in recent memory, bringing in a third-party provider to conduct an audit can often be a better strategy than trying to start with an in-house audit. Professionals who are bringing a fresh, unbiased perspective to the records are more likely to catch mistakes that might otherwise be overlooked.
However, organizations starting with a self-assessment to try to gauge the scope of any possible problems can start by reviewing a representative sample of forms, noting issues as they go. This can help guide a systemic review of all forms after the initial review is done. Employers must also verify that they have completed forms on file for all active employees, as well as for former employees as required by law. If errors are discovered, corrections should be made transparently; attempting to conceal them can lead to additional scrutiny in an audit and/or federal penalties.
Importantly, a business’s first self-audit should not be their last, especially for those in industries such as agriculture or manufacturing that tend to rely on immigrant labor, or in geographic areas subject to more frequent immigration enforcement. Depending on the employer, the sector, and the degree of employee turnover, regular reviews on a quarterly basis would be appropriate.
Protecting Your Business with Accurate Compliance
If your business isn’t sure what issues lurk in your I-9 records, and isn’t sure how best to legally fix them, CalWorkSafety & HR can help. In addition to conducting third-party audits that allow you to start with a clean slate, we provide training to enable your team to maintain compliance and avoid costly fines going forward. To learn more, contact us today.