📋 E-Verify & I-9 Compliance for Contractors
Construction is one of the most audited industries for employment eligibility verification. With a workforce that's heavily reliant on immigrant labor, getting I-9 and E-Verify compliance right isn't just good practice — it's essential for avoiding crippling fines and protecting your ability to bid government work.
I-9 compliance is about the process, not the outcome. You're not expected to be an immigration expert. You ARE expected to follow the I-9 process correctly for every employee — consistently, without discrimination, and with proper documentation. Good process = good compliance.
I-9 Basics
What Is Form I-9?
Form I-9 (Employment Eligibility Verification) is a federal form required for every employee hired in the United States. It verifies that the employee is authorized to work in the US.
| Requirement | Details |
|---|---|
| Who must complete it | Every employer for every employee (citizens and non-citizens) |
| When | Section 1: Employee completes on or before first day of work. Section 2: Employer completes within 3 business days of start date. |
| Retention | Keep for 3 years from hire date OR 1 year after termination — whichever is later |
| Penalty for not completing | $252–$2,507 per form (first offense), up to $2,507 per form (repeat) |
The I-9 Process
Section 1 (Employee completes):
- Full legal name
- Address
- Date of birth
- Social Security Number (optional unless E-Verify employer)
- Citizenship/immigration status
- Signature and date
Section 2 (Employer completes):
- Examine original, unexpired identity and work authorization documents
- Record document information (title, issuing authority, number, expiration)
- Sign and date
Acceptable Documents
| List A (Identity + Work Authorization) | List B (Identity Only) | List C (Work Authorization Only) |
|---|---|---|
| US Passport or Passport Card | Driver's license | Social Security card (unrestricted) |
| Permanent Resident Card (Green Card) | State-issued ID card | Birth certificate |
| Employment Authorization Document (EAD) | School ID with photo | US Citizen ID Card |
| Foreign passport with I-94 | Voter registration card | Native American tribal document |
Employee must present: One List A document, OR one List B + one List C document.
You cannot tell employees which documents to present. You cannot require a driver's license, a Social Security card, or a Green Card. The employee chooses which acceptable documents to show. Specifying documents is considered discrimination under the Immigration and Nationality Act.
E-Verify
What Is E-Verify?
E-Verify is a web-based system operated by USCIS (U.S. Citizenship and Immigration Services) that electronically compares the I-9 information to government databases to confirm work authorization.
| Feature | Details |
|---|---|
| Voluntary or mandatory? | Mandatory for federal contractors (FAR E-Verify clause), many state contractors, and in some states for all employers. Voluntary for others. |
| Cost | Free |
| Timeline | Must submit within 3 business days of hire (same as I-9 Section 2) |
| Results | Employment Authorized, Tentative Nonconfirmation (TNC), or DHS/SSA referral |
Who Must Use E-Verify?
| Category | E-Verify Required? |
|---|---|
| Federal contractors (FAR 52.222-54 clause in contract) | Yes — for new hires on the contract, and optionally all new hires company-wide |
| Federal subcontractors ($150K+ subcontract, performance period 120+ days) | Yes — flows down |
| State requirements — Arizona, Mississippi, Alabama, South Carolina, others | Yes — varies by state and employer size |
| Prevailing wage / public works (some states) | Yes — in some states |
| Private employers (most states) | Voluntary |
States Requiring E-Verify (for Some or All Employers)
| Mandatory for All Employers | Mandatory for Government Contractors | Mandatory for Large Employers |
|---|---|---|
| Alabama, Arizona, Mississippi, South Carolina | Most states with public works contracts | Florida (25+ employees), Georgia (10+ employees), others |
The E-Verify Process
- Employee completes I-9 Section 1
- Employer completes I-9 Section 2
- Employer enters I-9 data into E-Verify within 3 business days
- E-Verify checks SSA and DHS databases
- Result: Employment Authorized (green) or Tentative Nonconfirmation (TNC - yellow)
- If TNC: Employee has 8 federal workdays to contest or resolve
- Employer cannot terminate or reduce hours during the TNC contest period
- Final result: Employment Authorized or Final Nonconfirmation
A Tentative Nonconfirmation does NOT mean the employee is unauthorized. Common causes include:
- Name change not updated with SSA
- Typographical errors on the I-9
- SSA database delays
- Naturalization records not yet updated
You must give the employee the opportunity to contest. Firing someone over a TNC without allowing them to contest is illegal.
Construction-Specific Considerations
Why Construction Gets Extra Scrutiny
| Factor | Impact |
|---|---|
| High proportion of immigrant workforce | Industry-wide estimate: 25–30% of construction workers are foreign-born |
| High turnover | Frequent hires mean more I-9s and more chances for errors |
| Subcontractor chains | Multiple tiers of subs make enforcement complex |
| Government contracts | E-Verify required on most federal construction |
| Union hiring halls | Dispatch process interacts with I-9 timing requirements |
I-9 for Union Hiring Hall Employees
Union contractors face a unique challenge — workers are dispatched from the hiring hall, sometimes with little notice:
| Situation | I-9 Requirement |
|---|---|
| Worker dispatched, starts same day | Section 1 completed by start of work; Section 2 within 3 business days |
| Worker dispatched for a single day | Still must complete full I-9 (no exception for short assignments) |
| Worker returns after a break | If I-9 is still on file and employment wasn't terminated, may not need a new one. If rehired, check if I-9 is still valid. |
| Worker dispatched to multiple contractors | Each contractor must have their own I-9 on file |
Subcontractor I-9 Obligations
| Question | Answer |
|---|---|
| Am I responsible for my sub's I-9 compliance? | Not directly — each employer is responsible for their own employees |
| Can a GC be liable for a sub's violations? | Potentially, if the GC had knowledge of or benefited from unauthorized workers |
| Should I require subs to certify I-9 compliance? | Yes — include a compliance certification in your subcontract |
| Can I review my sub's I-9 forms? | Generally no — I-9s contain sensitive information. Require certification instead. |
Audits and Investigations
Who Audits?
| Agency | What They Do |
|---|---|
| ICE (Immigration and Customs Enforcement) | Worksite enforcement, I-9 audits, criminal investigations |
| DOL (Department of Labor) | May identify I-9 issues during wage/hour investigations |
| USCIS | E-Verify compliance reviews |
| State agencies | Some states have their own enforcement |
| Contracting agencies | May audit E-Verify compliance on government contracts |
The I-9 Audit Process (ICE "Silent Raid")
- ICE serves a Notice of Inspection (NOI) — you have 3 business days to produce I-9 forms
- ICE reviews all I-9 forms for technical errors and substantive violations
- ICE identifies employees with questionable work authorization
- You receive a Notice of Suspect Documents — must allow employees to correct
- If employees can't provide valid documents, you receive a Notice of Discrepancies — you must terminate
- ICE issues fines for I-9 violations
Penalty Ranges
| Violation Type | First Offense | Second Offense | Third+ Offense |
|---|---|---|---|
| Substantive I-9 violations (per form) | $252–$2,507 | $252–$2,507 | $252–$2,507 |
| Knowingly hiring/continuing to employ unauthorized workers | $698–$5,579 | $5,579–$13,946 | $8,369–$27,894 |
| Document fraud | $548–$5,484 | $548–$5,484 | $548–$5,484 |
| Pattern or practice of violations | Criminal penalties — fines + imprisonment |
If you have 50 employees and ICE finds I-9 errors on 30 of them (common), fines can range from $7,560 to $75,210 — just for paperwork errors, even if every worker is authorized. Add in any knowingly employed violations and the numbers escalate dramatically.
Best Practices
I-9 Process
- Complete Section 1 on or before the first day of work — no exceptions
- Complete Section 2 within 3 business days of the start date
- Examine original documents in person (copies are not acceptable)
- Accept any valid combination of List A, or List B + List C documents
- Never specify which documents the employee must present
- Use the most current version of Form I-9 (check USCIS.gov)
- Keep I-9s in a separate file (not in the personnel file) — makes audits easier
- Set reminders for reverification of work authorization expiration dates
- Conduct annual self-audits of your I-9 files
E-Verify Process
- Submit E-Verify cases within 3 business days of the hire date
- Never submit an E-Verify case before the employee has been hired and started work
- Never use E-Verify for pre-screening candidates
- Allow employees to contest TNCs — do not take adverse action during contest
- Close all cases (Employment Authorized, Final Nonconfirmation, or case closed)
- Post the required E-Verify participation poster and Right to Work poster
Record Retention
| Record | Retention Period |
|---|---|
| I-9 form | 3 years from hire date OR 1 year after termination — whichever is later |
| E-Verify case results | Same as I-9 retention |
| Copies of documents (optional) | If you copy documents, copy them for ALL employees (to avoid discrimination) |
Self-Audit Your I-9s
Conduct an annual internal audit:
- Pull all current I-9 forms
- Check Section 1: Complete, signed, dated
- Check Section 2: Complete within 3 days, valid documents, signed, dated
- Check reverifications: Are any work authorizations expired?
- Check retention: Are terminated employees' I-9s still being held past the retention period?
- Correct errors: Use Section 3 for reverification; initial and date corrections on Sections 1 and 2
- Do NOT backdate corrections or create new I-9s for errors
Related Resources
- Government Contracts Guide — E-Verify requirements on federal work
- Multi-State Compliance — State E-Verify mandates
- Union Construction Guide — I-9 and hiring hall dispatch
- Worker Classifications — Employee vs. contractor (I-9 only applies to employees)