Employment Eligibility Verification: I-9, E-Verify, Penalties

Employment eligibility verification is the federally required process every U.S. employer uses to confirm that a new hire is legally allowed to work in the country. It runs on a single document, Form I-9, which the employee and employer complete together within days of the start date, and it may be supplemented by E-Verify, an online check against government databases. The rules apply to essentially every paid hire since November 6, 1986, and the penalties for skipping or botching them are steep.

Who Is Authorized to Work

Federal law recognizes four groups of people who can legally hold a job in the United States. U.S. citizens, whether born here or naturalized, have an unrestricted right to work. Noncitizen nationals, a small group mostly born in American Samoa or Swains Island, share that unrestricted right. Lawful permanent residents (green card holders) can work indefinitely. Everyone else needs specific work authorization from the Department of Homeland Security: temporary visa holders, asylum recipients, refugees, and others in similar statuses.¹

That last group is where employers have to pay attention over time. An H-1B worker’s authorization is tied to a specific employer and time window. An F-1 student on Optional Practical Training may have only 12 months, with a possible 24-month STEM extension available if filed before the original period expires.² Letting someone keep working past their authorization date creates the same liability as hiring an unauthorized worker to begin with.

Form I-9: The Core Requirement

Every person hired to work for pay in the United States after November 6, 1986, must have a completed Form I-9 on file. The employee fills out Section 1 with their name, address, date of birth, and an attestation of their work-authorized status. The Social Security number is required only if the employer participates in E-Verify; otherwise it’s voluntary.³

Not every worker triggers an I-9. Independent contractors don’t need one because they aren’t employees. Workers supplied through a staffing agency are the agency’s responsibility, not the client’s. Self-employed people don’t complete one for themselves unless they’re technically employed by their own business entity, such as a corporation.⁴

Acceptable Documents and the Employee’s Choice

The most important rule in this whole process: the employee chooses which documents to present. The employer cannot dictate the choice or ask for anything beyond what the lists require. Documents fall into three lists.⁵

List A documents prove both identity and work authorization on their own. Examples: U.S. passport, passport card, Permanent Resident Card, Employment Authorization Document.
List B documents prove identity only. Examples: state driver’s license, government-issued photo ID.
List C documents prove work authorization only. Examples: unrestricted Social Security card, U.S. birth certificate.

An employee presents either one List A document or a combination of one List B and one List C document. If someone hands over a driver’s license and an unrestricted Social Security card, that’s a complete, valid combination, and asking for anything more is a violation.³

When the Employee Has a Receipt Instead

If a document was lost, stolen, or is being replaced, the employer must accept a receipt showing the replacement has been applied for, provided the job will last more than three business days. The receipt gives the employee 90 days to produce the actual document. A second receipt to cover an expired first receipt is not allowed.⁶

Examining Documents and the Three-Day Deadline

The employer must physically examine the original documents to confirm they reasonably appear genuine and relate to the person presenting them. You aren’t expected to be a forensic examiner, but photocopies won’t satisfy the requirement. Once the documents are reviewed, the employer completes Section 2 by recording each document’s title, issuing authority, number, and expiration date.³

The deadline is short. Section 2 must be completed within three business days of the employee’s first day of work. If the employee starts Monday, Section 2 has to be done by Thursday. For jobs lasting fewer than three business days, Section 2 must be finished on the first day. No grace period.³

Remote Examination for E-Verify Employers

Employers enrolled in E-Verify in good standing can examine documents remotely through a live video interaction. The employee transmits copies of their documents first, then shows the same originals on camera during a video call. The employer checks a box on the Form I-9 indicating the alternative procedure was used and keeps clear copies of the documentation. This option has to be applied consistently at each hiring site; the only permissible distinction is between remote and onsite workers, never based on citizenship or national origin.⁷

What Employers Cannot Do

The verification process creates obvious discrimination risks, and federal law is strict about them. Employers cannot demand more documents than the law requires, reject documents that reasonably appear genuine, or steer employees toward specific documents based on citizenship status or national origin. Telling a noncitizen to produce a green card, or asking a U.S. citizen who “looks foreign” to show a passport, violates federal anti-discrimination provisions even when it’s framed as extra caution.⁸

The working rule is simple. Let the employee pick from the acceptable lists, and accept whatever they present as long as it reasonably appears genuine and relates to them.⁵

Keeping the Form and Reverifying When Needed

Every completed Form I-9 must be kept for either three years after the hire date or one year after employment ends, whichever is later. Hire someone on January 1, 2026, who leaves on June 1, 2026, and the three-year mark (January 1, 2029) is later than the one-year post-termination mark, so the form stays on file until January 2029.³

When an employee’s work authorization has an expiration date, the employer must reverify before that date passes, using Supplement B of Form I-9. Reverification is never required for U.S. citizens, noncitizen nationals, or lawful permanent residents. It’s also not triggered by the expiration of a U.S. passport, a Permanent Resident Card, or a List B identity document, because those expirations don’t affect the underlying work authorization.⁹

E-Verify: The Optional (or Mandatory) Second Layer

E-Verify is an online system run by the Department of Homeland Security and the Social Security Administration that cross-checks Form I-9 information against government databases and returns a result in seconds.¹⁰

For most private employers at the federal level, E-Verify is voluntary. The exception is federal contractors: any contract awarded after September 8, 2009, that includes the FAR E-Verify clause requires the contractor, and subcontractors on contracts over $3,500, to run all new hires through the system.¹¹ A growing number of states also mandate E-Verify for private employers, with requirements that vary by employer size.

When the data matches, E-Verify returns “Employment Authorized” and closes the case automatically. The employer records the case number on the I-9 and is done.¹² When the data doesn’t match, the system issues a Tentative Nonconfirmation, sometimes called a mismatch. This isn’t a final determination. The employee has 8 federal government working days from the date the employer refers the case to contact the relevant agency and resolve the discrepancy.¹³ During that window the employer cannot fire, suspend, withhold pay, delay training, or take any other adverse action against the employee because of the mismatch.¹⁴

If the issue can’t be resolved, the case becomes a Final Nonconfirmation. The employer must close the case and indicate whether they will continue employing the person. Continuing employment after a Final Nonconfirmation carries significant legal risk.¹²

Penalties for Getting It Wrong

I-9 penalties fall into three tiers, and the numbers have climbed well above the original statutory figures because of annual inflation adjustments.

Paperwork Violations

Failing to properly complete or retain Form I-9, including missing fields, late completion, and lost forms, currently draws fines ranging from $288 to $2,861 per form. The statute’s base range is $100 to $1,000, but inflation adjustments have pushed the effective range considerably higher.¹ Business size, good-faith effort, seriousness, and prior history all affect where the fine lands.

Hiring Violations

Knowingly hiring or continuing to employ an unauthorized worker is far more expensive. The inflation-adjusted 2025 ranges are:

First offense: $716 to $5,724 per unauthorized worker
Second offense: $5,724 to $14,308 per worker
Third or subsequent offense: $8,586 to $28,619 per worker

These stack quickly. A company caught with ten unauthorized workers on a second offense faces potential fines exceeding $143,000.¹

Criminal Penalties

Employers engaged in a pattern or practice of hiring unauthorized workers face criminal prosecution, with fines up to $3,000 per unauthorized worker and up to six months in prison for the overall pattern. The threshold is lower than many employers assume. A pattern of looking the other way on documentation across a handful of hires can meet it.¹

1
Office of the Law Revision Counsel. 8 USC 1324a – Unlawful Employment of Aliens
2
Study in the States. F-1 STEM Optional Practical Training (OPT) Extension
3
U.S. Citizenship and Immigration Services. Instructions for Form I-9, Employment Eligibility Verification
4
U.S. Citizenship and Immigration Services. 2.0 Who Must Complete Form I-9
5
U.S. Citizenship and Immigration Services. 4.0 Completing Section 2 – Employer Review and Verification
6
U.S. Citizenship and Immigration Services. Acceptable Receipts
7
U.S. Citizenship and Immigration Services. 4.5 Remote Document Examination
8
Department of Justice, Civil Rights Division. Understanding the Immigration and Nationality Acts Anti-Discrimination Provision
9
U.S. Citizenship and Immigration Services. Completing Supplement B, Reverification and Rehire of Form I-9
10
U.S. Department of Homeland Security. What is E-Verify
11
E-Verify. 1.3 The Federal Acquisition Regulation (FAR) E-Verify Clause in a Contract
12
E-Verify. 4.1 Close Case
13
E-Verify. Further Action Notice – Tentative Nonconfirmation (TNC)
14
E-Verify. Tentative Nonconfirmations (Mismatches)