What Every Employer Needs to Know About Form I-9 Inspections and Through Recent Developments

Federal worksite enforcement has changed significantly in recent months. If your business employs employees within the United States, you will have access to Form I-9, and it could expose you to serious financial liability if it is not completed correctly, according to new guidelines that are set forth. Below is a breakdown of what you need to understand about how I-9 inspections work, what the government is looking for, and why recent policy changes have raised the stakes for employers across every industry.

The Legal Basis for I-9 Requirements

Federal law has required employers to verify the identity and work authorization of every person hired in the United States. This obligation stems from the Immigration Reform and Control Act (IRCA), codified under the Immigration and Nationality Act. The vehicle to ensure verification is the Employment Eligibility Verification form (Form I-9).

Employers are required to keep completed I-9 forms on file for all current employees and, for former employees, for at least three years from the first day of employment or one year from the date employment ends.

How an I-9 Inspection Actually Unfolds

Inspections are conducted by U.S. Immigration and Customs Enforcement (ICE), which is part of U.S. Department of Homeland Security (DHS). The process begins when the agency serves a Notice of Inspection (NOI) on your business. From there, you have at least three (3) business days to produce your I-9 forms and supporting documentation, which may include payroll records, a list of current and former employees, and business licenses. Agents then review the forms for compliance and if any technical or procedural errors are found, a business entity typically has a minimum of ten (10) business days to correct them. If the violations remain incorrect or are classified as substantive issues from the beginning of the review, the agency then has authority to issue fines.

At the conclusion of an inspection, ICE may issue one of several notices, which can include, but is not limited to, a Notice of Intent to Fine (NIF).

The Policy Change Employers Should Know About

I-9 paperwork violations fall into two categories: substantive violations (those that could directly relate to employing an unauthorized worker) and technical or procedural violations (minor administrative errors that employers had the opportunity to correct before penalties are imposed). That distinction mattered enormously, because errors deemed technical or procedural came with a correction window, as mentioned above.

In March 2026, ICE updated its I-9 inspection fact sheet and reclassified several common errors as substantive violations subject to immediate fines. Many of these infractions were previously classified as technical or procedural violations. The newly reclassified violations include, among others:

• Missing date of birth
• Missing date of hire
• Failure to date Section 1 or Section 2
• Missing title of the employer or authorized representative
• Preparer and/or translator errors
• Failure to enter a rehire date
• Procedural failures related to remote document verification, including failure to mark the alternative procedure box when required, or using the remote process without being an active EVerify participant.

These are the kinds of fields that are easy to overlook in a busy onboarding process. Under the previous framework, they were the kinds of errors that could be fixed. Under the current guidance, they can trigger a fine without any opportunity to correct them and are therefore essential to highlight to ensure proper compliance.

How Penalties Are Calculated

Fine amounts are not fixed. ICE calculates penalties based on the percentage of I-9 forms found to have violations out of the total number of forms that should have been presented. That percentage determines the applicable fine range, which also varies depending on whether the inspection is a first, second, third, or greater offense.

Once a base fine is established, ICE adjusts the amount up or down based on five statutory factors: the size of the business, the employer's good faith, the seriousness of the violations, whether unauthorized workers were involved, and the employer's prior violation history. Each factor can increase or decrease the penalty by up to five percent, for a cumulative total of plus or minus 25 percent.

Bottom Line

The update to how I-9 violations are classified marks a meaningful shift in enforcement that employer need to pay extra attention to. What were once correctable oversights may now carry more immediate financial consequences.

This shift also raises unsettled legal questions. Employers and practitioners may have grounds to challenge the rule changes on fair notice principles, given longstanding reliance on the prior classification framework. Additionally, the manner in which this policy was presented may present procedural questions under the Administrative Procedure Act (APA). Whether or not the courts will view the roll out of this policy via fact sheet as a permissible classification or an improper change remains uncertain. Furthermore, the removal of certain correction opportunities for employer may further invite scrutiny where employers acted out of good faith on prior published guidance. While all these issues remain unresolved, practitioners should prepare to raise their arguments in proceedings.

In the meantime, employers should take proactive steps now by auditing existing internal audit protocols to account for errors that may now carry heightened classification risk, consider whether strengthening internal onboarding procedures is necessary, and ensuring that all individuals responsible for completion and review are properly alerted, given these new changes.

We will continue to monitor updates on this matter, as there may be legal challenges to this expanded requirement—how those changes are being implemented via fact sheet and this is highly improper. Should you have questions or concerns regarding your specific circumstance, we recommend contacting the immigration department at Pasricha & Patel, LLC to schedule a consultation.