I-9 Compliance: What Employers Need to Know Before an Audit Finds You

FALL 2025. - Last month, a suburban Chicago restaurant owner received a Notice of Inspection from ICE. They had three days to produce I-9 forms for every employee hired in the past three years. Half the forms were missing. The ones they had were filled out incorrectly. The result? Over $80,000 in fines.

I-9 forms seem simple, but they're one of the most commonly mishandled employment documents. Here's what Illinois employers need to know to avoid costly violations.

What Is an I-9 Form?

The I-9 (Employment Eligibility Verification) is a federal requirement for every employer. You must complete an I-9 for every employee you hire, regardless of citizenship status. This includes U.S. citizens, permanent residents, work visa holders, and even employees who work for just one day.

The purpose is to verify that every person working for you is legally authorized to work in the United States.

Critical Timing Requirements

Section 1 (Employee completes): Must be completed on or before the employee's first day of work. Not the second day. Their first day.

Section 2 (Employer completes): Must be completed within three business days of the employee's first day. You must physically examine original documents during this time.

Section 3 (Reverification): Only required when work authorization expires or when rehiring an employee within three years.

Common mistake: Letting someone start work on Monday and telling them to "bring documents tomorrow." That's a violation. Section 1 must be done before work begins.

Acceptable Documents

Employees must prove identity and work authorization by providing:

Either: One List A document (proves both identity and work authorization)

• U.S. passport

• Permanent Resident Card (Green Card)

• Employment Authorization Document

Or: One List B document (proves identity) AND one List C document (proves work authorization)

• List B: Driver's license, state ID, school ID

• List C: Social Security card, birth certificate

Five Rules Employers Get Wrong

1. You cannot specify which documents to accept Telling an employee to bring a specific document (like a Social Security card or driver's license) is illegal document abuse. The employee chooses which documents to present.

2. You must accept documents that appear genuine If a document looks real and reasonably appears to belong to the person presenting it, you must accept it. You're not expected to be a document expert.

3. You cannot require more documents than necessary If an employee shows a U.S. passport (List A), that's sufficient. You cannot ask for additional documents "just to be safe."

4. You must examine original documents in person Copies aren't acceptable. You must physically see originals. Remote verification ended in May 2023.

5. Use the current form version Using an outdated I-9 form is a violation. Always download the current version from uscis.gov (as of 2024, edition date 08/01/23).

Common Violations and Penalties

Penalties range from $272 to $2,701 per violation for paperwork errors. Common violations include:

• Missing I-9s: No form on file for an employee

• Late completion: Form completed outside required timeframe

• Incomplete forms: Missing signatures, dates, or document information

• Uncorrected Section 1 errors: Employee filled it out wrong and you accepted it

• Failure to reverify: Employee's work authorization expired and you didn't reverify

• Document abuse: Requiring specific documents or treating employees differently based on citizenship

For knowingly hiring unauthorized workers, penalties range from $676 to $21,916 per worker for first offenses.

Real-world impact: A small business with 20 employees and I-9 errors on just half the forms could face $27,000 in fines.

What Happens During an ICE Audit

1. Notice of Inspection: ICE gives you three business days to produce all I-9 forms for current employees and former employees hired within the past three years.

2. The Audit: ICE reviews every form for compliance, looking for missing forms, timing violations, and technical errors.

3. Notice of Intent to Fine: If violations are found, ICE details each violation and proposed penalty. You have 30 days to respond.

How to Protect Your Business

Conduct an internal I-9 audit Review every I-9 for missing forms, incomplete sections, missing signatures or dates, and expired work authorizations. Consider working with an employment attorney for your first audit.

Create a consistent process

• Give new hires the I-9 form before or on their first day

• Set a reminder to complete Section 2 within three business days

• Review completed forms for errors immediately

• File forms separately from personnel records

Train your HR staff Anyone completing I-9s should understand acceptable documents, timing requirements, common mistakes, and anti-discrimination rules.

Set reverification reminders For employees with temporary work authorization, set calendar reminders 60-90 days before expiration.

Treat all employees equally Asking only foreign-looking or foreign-sounding employees for documents is illegal discrimination.

Making Corrections

For technical errors (missing dates, signatures): Draw a line through the error, write the correct information, initial and date the correction in different color ink.

For substantive violations (missing I-9s, late verifications): These require careful handling, often with legal guidance. You generally cannot backdate forms or create I-9s for employees who've been working for months.

Retention Requirements

You must keep I-9 forms for:

• Three years after the date of hire, OR

• One year after employment ends

Whichever is later.

Store I-9s separately from personnel files to make them easier to produce during audits and protect other confidential information.

The Bottom Line

I-9 compliance isn't complicated once you have a system in place. It just requires attention to detail and consistency. But the consequences of non-compliance are serious:

• Fines from $272 to $2,701 per form for paperwork violations

• Fines up to $21,916 per worker for knowingly hiring unauthorized workers

• Potential criminal penalties

• Business disruption during audits

Take an afternoon to review your I-9 files. Train your staff. Create a checklist. These simple steps can save you from a crisis when ICE shows up at your door.

Don't wait until you receive a Notice of Inspection. By then, it's too late to fix the problems.

Questions about I-9 compliance or need help with an internal audit? I offer consultations to Illinois employers to review I-9 files and create compliance systems. Let's protect your business before an audit finds you.