Form I-9: What It Is, What It’s Used For, and Why It’s Key to Operating in the United States

The Form I-9 is one of the most important documents within the U.S. employment system. Although many people see it as a simple administrative requirement, it actually serves a critical purpose: verifying identity and legal authorization to work in the United States.

Every company that hires employees in the U.S., regardless of its size or whether its owners are foreign nationals, must comply with this process. Failure to complete it correctly can result in penalties, fines, and even legal issues that may affect business operations.

Understanding what Form I-9 is, how it is completed, and why it is mandatory is essential for any company that wants to operate formally and securely in the U.S. market.

What Is Form I-9?

Form I-9, officially called Employment Eligibility Verification, is a form required by the U.S. government to confirm that a person is legally authorized to work in the country.

This document is not automatically submitted to a federal agency, but must be retained by the employer and made available in case of audits or inspections by authorities.

Its main purpose is to prevent the hiring of individuals without legal work authorization, protecting the integrity of the U.S. labor system.
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Who Is Required to Complete Form I-9?

The use of this form is mandatory for:

• Companies established in the United States
• Employers who hire personnel within the country
• Small, medium, and large businesses
• Employers with U.S. or foreign owners

Both U.S. citizens, permanent residents, and foreign nationals with work authorization must complete the form when starting an employment relationship.

It is important to note that independent contractors are not subject to Form I-9, as they are not considered employees under U.S. labor law.

When Must Form I-9 Be Completed?

The process for completing this form follows specific timelines:

• The employee must complete their section no later than the first day of work
• The employer must review documents and complete their section within three days of the employee’s start date

Failing to meet these deadlines may result in noncompliance, even if the employee is legally authorized to work.

Structure of Form I-9

Form I-9 is divided into three main sections, each with clear responsibilities.

Section 1: Employee Information

In this section, the worker provides personal information and declares their immigration or work authorization status. This section must be completed by the employee without employer involvement.

Section 2: Employer Review

Here, the employer reviews the documents presented and certifies that they appear genuine and valid. This is not a deep legal verification, but rather a reasonable review.

Section 3: Rehires or Updates

This section is used when an employee is rehired or when previously recorded work authorization must be updated.

Documents Accepted for Form I-9

The U.S. government classifies documents into three lists:

List A

Documents that prove both identity and work authorization, such as a U.S. passport or certain employment authorization documents.

List B

Documents that prove identity, such as state-issued driver’s licenses.

List C

Documents that prove authorization to work, such as a Social Security card valid for employment.

The employee may present one document from List A or a combination of one from List B and one from List C.
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Importance of Form I-9 for Businesses

Proper compliance with this form is a clear sign that a company operates within the U.S. legal framework. Additionally, it:

• Reduces legal risks and penalties
• Protects the employer during audits
• Reinforces business formality
• Builds trust with partners and investors

For growing companies or those planning to expand, this compliance is essential to maintaining a strong and professional structure.

Form I-9 and Audits in the United States

The Department of Homeland Security (DHS) and other agencies may request a review of a company’s stored Form I-9 records.

During an audit, authorities evaluate:

• Whether all employees have a valid Form I-9
• Whether the form is properly completed
• Whether the reviewed documents meet requirements

Common errors, incomplete forms, or incorrect documentation can lead to significant fines.

Common Mistakes When Managing Form I-9

Some frequent errors include:

• Not completing the form on time
• Accepting invalid documents
• Failing to retain the form for the required period
• Discriminating by requesting specific documents
• Not updating expired work authorizations

Avoiding these mistakes helps maintain compliance and reduces unnecessary risk.

How Long Must Form I-9 Be Retained?

Employers must retain each Form I-9 for:

• Three years after the date of hire, or
• One year after employment ends

Whichever period is longer must be followed.

Form I-9 and Companies with Foreign Owners

For foreign entrepreneurs who establish a business in the United States, Form I-9 is a core part of labor compliance.

Although the owner may not always be required to complete one for themselves, they must properly implement the process for any employee hired, even if the company is small or newly formed.

Poor management at this stage can negatively affect the company’s future operations.

Best Practices for Managing Form I-9

For proper administration, it is recommended to:

• Always use the most current version of the form
• Train staff responsible for the process
• Maintain organized and accessible records
• Periodically review temporary authorizations
• Seek professional guidance when needed

These practices simplify compliance and reduce risks during inspections.
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Frequently Asked Questions About Form I-9

Is Form I-9 submitted to the government?
No. The form is kept internally and only provided if requested by an authority.

Does it apply to remote workers?
Yes. Even for remote work, employers must complete the process according to current rules.

Can a foreign national complete Form I-9?
Yes, as long as they have legal authorization to work in the United States.

What happens if Form I-9 requirements are not met?
The company may face fines, administrative penalties, and legal issues.

Conclusion

Form I-9 is far more than an administrative requirement: it is a key element of labor compliance in the United States. Managing it correctly protects the business, reduces risk, and strengthens operational legality.

If you plan to start a company in the U.S. or hire employees, having proper guidance from the beginning can make the difference between structured growth and avoidable problems.

At Openbiz, we help you structure your U.S. business and comply correctly with labor and administrative obligations, so you can operate with confidence and security from day one.