ALERT: Employers Face Increased Penalties for Form I-9 Compliance Errors

For many employers, Form I-9 compliance has long been viewed as a routine part of the hiring process. Recent updates from the U.S. Immigration and Customs Enforcement (ICE) agency, however, make it more important than ever to complete paperwork right the first time. Several errors that were previously considered technical and correctable are now classified as substantive violations, increasing the potential for costly penalties during an inspection.

While employers are typically granted a 10-business day window to correct technical/procedural violations in the event of an inspection, they are subject to immediate penalties and fines for substantive violations. The newly updated Form I-9 Inspection Fact Sheet, updated March 16, 2026, highlights key updates to established practices and the violations that have been reclassified as substantive.

What Changed?

Several common errors that were previously considered technical/procedural violations have been reclassified as substantive carrying increased risk, including:

Missing or incomplete information in the Employee Section (Section 1)

• Employee date of birth
• USCIS/alien number
• Date next to employee signature
• Expiration date (Box 4)

Missing or incomplete information in the Employer Section (Section 2)

• Name/title of employer representative
• Document information (i.e., document title, number, issuing authority, or expiration), even when document copies were retained
• Date next to employer representative signature
• First day of employment in the Certification

Additional compliance risks

• Failure to enter rehire date
• Spanish-language Form I-9 used outside Puerto Rico
• Incomplete preparer/translator data in Supplement A (i.e., name, address, signature, or date)
• Failure to check alternative procedure box when using remote verification
• Failure to be enrolled in E-Verify when using remote verification
• Procedural failures or deficiencies of digital software managing Form I-9 compliance (i.e., electronic I-9 audit trail, e-signature, security documentation)

Why It Matters?

These changes significantly increase employer exposure in a variety of ways:

• Increased Penalty Exposure and Financial Risk
  Only technical/procedural violations qualify for a correction window during an inspection. Reclassifying these common mistakes means that potential relief option is no longer available – these errors may now carry immediate, cumulative penalties ranging from $288 - $2,681 per form.
• Safety Net Removal (Verification Documents Copies)
  Historically, retaining copies of verification documents as a best practice allowed employers to correct missing information during an inspection. These reclassifications remove that safeguard – errors are now immediately subject to cumulative fines, even when supporting documentation is on file.
• Provider-Related Risk
  While many organizations rely on electronic Form I-9 systems for efficiency (e.g., HRIS/Payroll systems, Form I-9 management systems, etc.), these updates clarify that employers are liable for substantive violations even when errors stem from failures or limitations within their software providers’ systems.

When combined with the current administration’s increased enforcement focus, these reclassifications significantly elevate the risk to organizations associated with even routine Form I-9 errors in the event of an inspection.

Next Steps for Employers

Employers should consider the following proactive steps to facilitate compliance with these new updates and to mitigate risk of penalties and liability in the event of potential agency inspections:

• Conduct a Form I-9 Audit
  Regardless of prior audit practices, recent compliance changes warrant a fresh review of Form I-9 records. Employers who have not previously conducted an audit may still have an opportunity to correct errors and reduce potential penalty exposure before an inspection. For those with established audit processes, issues once considered technical may now be treated as substantive, making it important to revisit prior findings. When performing self-audits, employers should consult the U.S. Citizenship and Immigration Services (USCIS) employer guidance on proper correction methods. It is also important to note that I-9 audits are time-intensive, requiring review of forms for both active and terminated employees; as a result, some organizations may benefit from engaging third-party consultants to assist with the process and help mitigate risk.
• Continue Maintaining Copies of Verification Documents
  Although document copies no longer shield employers from substantive violations, maintaining them remains a best practice, as they allow errors to be identified and corrected more efficiently.
• Update and Provide Training
  Whether Form I-9 completion is handled by HR or shared across hiring managers, employer representatives should be trained on proper form completion procedures, including these updates and common errors, to confirm accuracy and catch issues in real time.
• Review Provider Systems
  Organizations using electronic Form I-9 completion and management systems and/or software should take this opportunity to verify that provider systems/software meet all applicable compliance requirements.
• Verify Remote Document Inspection Compliance
  Organizations using alternative/remote document inspection processes should confirm:
  • Employer representatives completing the form are trained to check the appropriate box on the form
  • The organization is actively enrolled in E-Verify at the time of remote verification
• Engage Legal Counsel if Needed
  If a Notice of Inspection (NOI) is received from a government agency, employers should immediately consult legal counsel regarding compliance obligations and potential exposure.

These updates represent a meaningful shift in Form I-9 enforcement and significantly narrow the margin for error for employers. Taking proactive steps now to review forms, strengthen processes, and ensure proper training can help reduce exposure and better position your organization in the event of an audit or inspection.

If you have questions about Form I-9 compliance, audits, or best practices, contact the AGH HR Consulting Services team to discuss your organization’s specific needs: