Getting Ahead of I-9 Audits: Why Employers Should Act Now to Stay Compliant

As 2025 draws to a close, employers are facing unprecedented scrutiny on I-9 compliance. With ICE audits on the rise and fines reaching record levels, conducting a year-end I-9 audit is critical to protect your business and ensure compliance heading into the new year.

For business owners and HR professionals, acting now is essential. A thorough internal I-9 audit not only minimizes the risk of costly penalties but also reinforces compliance practices and helps maintain smooth, uninterrupted operations.

Why I-9 Compliance Matters

Every employer in the United States is required to complete and retain a Form I-9 for each individual they hire for employment. This form verifies an employee’s identity and authorization to work in the U.S.

While the process may seem routine, errors on these forms can quickly add up to costly penalties. The Department of Homeland Security (DHS) and U.S. Citizenship and Immigration Services (USCIS) updated the I-9 form and introduced new rules for remote document verification, but only for employers who meet additional requirements.

Failing to use the correct form or properly verify documents can result in fines ranging from $234 to $2,861 per incorrect form, a significant increase from prior years.

Common I-9 Mistakes Employers Make

Even the most diligent HR teams can make simple mistakes that lead to compliance risks. Some of the most common include:

• Using outdated versions of the I-9 form

• Missing or incomplete employee or employer signatures

• Failing to complete the form within three business days of start date

• Incorrect document verification or missing document numbers

• Storing forms improperly or not retaining them for the required period

These errors, while often unintentional, can still lead to steep fines during an audit.

Key Focus Areas for a Year-End I-9 Audit

Based on insights from our recent webinar, here’s how employers can conduct an effective I-9 audit:

1. Check for Missing or Incomplete Forms

• Ensure all employees hired in 2025 have an I-9 on file.

• Review Section 2 (employer verification) for completeness.

• Verify that any expired work authorization documents have been reverified.

2. Correct Errors Properly

• Mistakes must be corrected with initials and dates.

• Consider maintaining a correction form alongside the original I-9 for transparency and documentation.

3. Secure Storage and Retention

• I-9s and medical information (PHI) should be stored separately from general personnel records.

• Remove age indicators and other unnecessary personal data from personnel files.

• Verify that terminated employees’ records are retained according to state requirements (typically 3–7 years).

• End-of-year is an ideal time to purge documents that have exceeded retention requirements.

• Never destroy records involved in pending litigation, EEOC charges, or government investigations; these require a litigation hold.

4. Establish a Routine Review Process

• Mark retention periods for each terminated employee during offboarding to ensure compliance.

• Develop a recurring schedule for reviewing personnel files and I-9 forms.

• Consider leveraging secure platforms like Dominion Payroll's isolved, which help satisfy electronic storage and password protection requirements, keeping sensitive documents organized and compliant.

  

The Value of Getting Ahead

A proactive I-9 audit isn’t just about avoiding fines, it protects your organization’s workforce, reputation, and operational stability.

Benefits include:

• Reduced risk of costly disruptions or penalties

• Demonstrated commitment to legal compliance

• Clear documentation ready for potential ICE or DHS audits

• Confidence for leadership and HR teams in their processes

How Dominion Payroll Can Help

I-9 reviews and personnel file audits can feel overwhelming, especially at the end of the year when everything else is competing for attention. That’s where Dominion Payroll’s Boost HR team can be a valuable resource.

Boost HR offers flexible, fractional HR support, which means you can lean on experienced HR professionals for guidance without needing a full in-house team. Whether you need help reviewing your I-9s, organizing personnel files, or making sure your retention practices line up with federal and state requirements, our team can walk you through each step.

Learn more about our Boost HR support »