Form I-9 Audits: What Businesses Need to Know
Author: Ty Leitow
Last Updated: September 12, 2025
Page 1 of Form I-9. The whole form, and instructions for how to complete it may be found here: https://www.uscis.gov/i-9
What Is a Form I-9?
A Form I-9 is a federal form issued by the U.S. Citizenship and Immigration Services (USCIS) to verify an employee's identity and their authorization to work in the United States.
During the onboarding process, businesses are required to complete a Form I-9 for every new employee. This process involves the employer reviewing original documents—not copies—that prove the person’s identity and work authorization. Acceptable forms of identification include a passport, a driver’s license and social security card, or a Permanent Resident Card (green card).
Employers must keep a completed Form I-9 on file for each employee. They must retain the form for at least 3 years after the date of hire or 1 year after the date of termination, whichever is later. Employers are not required to keep copies of the identification documents, but it can be helpful to have copies during an I-9 audit. Generally, companies should not ask employees to fill out a new Form I-9 unless their work authorization is about to expire or there is another valid reason.
What Is a Form I-9 Audit?
A Form I-9 audit is when U.S. Immigration and Customs Enforcement (ICE) or the U.S. Department of Homeland Security (DHS) inspects a business to ensure compliance with Form I-9 regulations. These audits are not raids; they are compliance checks.
Usually, an audit is initiated when ICE serves your company with a Notice of Inspection (NOI). Upon receiving an NOI, your company has only 3 business days to produce all requested I-9 Forms and related payroll and employment records. The NOI will specify exactly what information ICE is looking for, which typically includes a list of current employees and employees who have been terminated within the last year, their I-9 forms, and relevant payroll records.
During an audit, ICE agents and auditors review the I-9s and documentation for:
Completeness: Checking for missing fields, incorrect dates, or improper signatures.
Timeliness: Verifying that the I-9 was completed within the legal deadlines (e.g., Section 1 completed by the employee on Day 1 of work, Section 2 completed by the employer within 3 business days).
Document Validity: Ensuring the documents presented appear acceptable and not fraudulent.
Retention Compliance: Confirming that old I-9s have been properly maintained or discarded.
At the conclusion of an audit, the business will receive a Notice of Findings, which could include a letter of compliance, a warning notice, or a notice of intent to fine.
Civil Liability of a Form I-9 Audit
Most financial penalties for failing a Form I-9 audit are assessed per violation, meaning fines can add up quickly if a business has poor record-keeping or flawed I-9 procedures. There are generally two types of I-9 violations: (1) paperwork violations and (2) knowingly hiring or continuing to employ unauthorized workers.
Paperwork violations are mistakes or omissions on the I-9 form, such as an employee failing to sign or the employer missing a section. Fines for paperwork violations currently range from $288 to $2,861 per violation.
Fines for knowingly hiring or continuing to employ unauthorized workers are much more serious and escalate for repeated offenses.
First Offense: $716 to $5,724 per violation
Second Offense: $5,724 to $14,308 per violation
Third or Subsequent Offense: $8,586 to $28,619 per violation
The range of fines depends on several factors that ICE considers, including the size of the business, the employer's good faith, the seriousness of the violations, and the company's history of previous violations.
Criminal Liability of a Form I-9 Audit
While most Form I-9 audits only lead to civil fines, an audit can result in criminal prosecution if ICE finds evidence of serious or intentional violations.
An audit may escalate to a criminal investigation if there is a "pattern or practice" of intentionally violating I-9 regulations. A pattern or practice involves repeated, intentional misconduct rather than isolated mistakes.
When a criminal investigation begins, ICE may conduct interviews with HR staff, managers, and executives; subpoena payroll and tax records; and coordinate with the Department of Justice (DOJ) for potential prosecution.
Criminal penalties for a pattern or practice violation can include fines of up to $3,000 per unauthorized worker and imprisonment for up to 6 months. If an employer is found to be concealing, harboring, or shielding unauthorized workers, the penalties are even more severe, including fines from $10,000 to $250,000 and prison sentences from 6 months to 20 years.
Additionally, any person found to have made false statements on I-9s or employers who conspire to commit immigration violations can be fined and imprisoned for up to 5 years.
Other Consequences of Form I-9 Violations
Beyond the civil and criminal penalties, businesses should also consider the indirect impacts of failing a Form I-9 audit, including:
Reputational Damage: ICE enforcement actions and settlements are often public, which can harm brand trust and public perception.
Operational Disruption: The loss of workers can negatively impact operations if a substantial part of your workforce is deemed unauthorized.
Increased Scrutiny: An audit may result in follow-up audits and monitoring agreements to ensure ongoing compliance.
Debarment: The business may be restricted from receiving federal contracts.
Preparedness and Compliance
To prepare for a potential audit, businesses should periodically conduct internal audits of their Form I-9s to correct any mistakes. All I-9 forms should be saved and organized separately from employee files for easy access.
When performing an internal audit, check each form for missing information, signatures, or dates, and look for common errors, such as:
Using outdated versions of Form I-9.
The employee failing to complete Section 1 on their first day of employment.
The employer failing to complete Section 2 within 3 business days of the employee’s start date.
Forgetting to re-verify employment authorization for employees with temporary work permits.
Requesting or accepting expired documents.
Maintain an audit log to document the employee's name, the error, and the corrective action taken. For minor errors, cross out the incorrect information, enter the correct information, and initial and date the change (do not use whiteout). For significant errors, complete a new, correctly filled-out I-9 and attach it to the original, along with a dated explanation.
Additionally, consider using E-Verify, a federal system that verifies an employee's eligibility against federal databases.
Providing regular training to hiring managers and HR staff on how to properly complete, audit, and store I-9 forms, as well as how to identify invalid documents and avoid discriminatory practices can go a long way to showing a company’s good faith effort to ICE during an audit.
In addition to conducting internal audits, companies should create an audit response plan. With only 3 days to respond to an NOI, having an established plan is critical.
Designate a point person or a team to manage all interactions with ICE and handle the audit response.
Develop a response protocol that outlines roles and responsibilities. Train key personnel on how to respond to an ICE visit, review warrants, and document the encounter.
Understand ICE warrants. Your designated staff should be able to differentiate between a judicial warrant (signed by a judge) and an administrative warrant, as they grant different levels of authority.
Gather requested documents promptly. When an NOI is received, collect all requested I-9 forms and other documentation immediately.
Consult legal counsel. Have an experienced immigration or employment attorney on call to guide you through the process and ensure a compliant response.
References
National Employment Law Project & National Immigration Law Center. What to Do if Immigration comes to your Workplace. Accessed September 10, 2025. https://www.nilc.org/wp-content/uploads/2017/07/EmployerGuide-NELP-NILC-2017-07.pdf
Harley, Mark D. & Wadhwani, Catherine V. (February 11, 2025). Employers May Face Civil and Criminal Penalties for Immigration Violations. Fox Rothschild. https://www.foxrothschild.com/publications/employers-may-face-civil-and-criminal-penalties-for-immigration-violations#:~:text=to%20ensure%20compliance.-,Criminal%20Penalties%20for%20Immigration%20Violations,personal%20assets%20in%20extreme%20cases
Oursolve. (July 16, 2025). Legal series: penalties for form i-9 violations: what’s at stake in 2025. https://www.outsolve.com/blog/legal-series-penalties-for-form-i-9-violations-whats-at-stake#:~:text=For%20a%20first%20offense%2C%20between,for%20Form%20I%2D9%20Violations
Divatia, Akshat. (March 19, 2025). An I-9 Compliance Checklist. Harris Sliwoski. https://harris-sliwoski.com/blog/an-i-9-compliance-checklist/#:~:text=Complete%20Section%202%20within%20three,Recordkeeping%20and%20Storage%20Requirements
Turnbill, Andrew R. & Mollaneda, Idrian. (February 24, 2025). ICE is Knocking - Practical Steps to Prepare and Respond. Morrison Forester. https://www.mofo.com/resources/insights/250224-ice-is-knocking-practical-steps
Worksite. (February 26, 2025). Preparing Your Business for an ICE Audit or Raid: Best Practices for Employers. https://worksitehr.com/preparing-your-business-for-an-ice-audit-or-raid-best-practices-for-employers/