Most business owners might not think twice about Form I-9s during onboarding. It’s just one more form in the stack, right? All you have to do is simply sign, file, and move on. What they don’t realize is that, over the past few years, the government has started scrutinizing hiring paperwork far more aggressively.
Quiet audits are now very common, and even minor errors that the IRS previously overlooked can result in serious penalties. In fact, since 2018, over 5,200 businesses have received I-9 audit notices, and in 2023 alone, companies paid more than $14 million in penalties, some facing fines that topped $1.5 million.
If your Form I-9 processes are outdated or incomplete, your business is already at risk. Recent changes to Form I-9, along with stricter enforcement protocols, mean employers must verify documents more precisely, retain records according to updated timelines, and be prepared to produce compliant forms immediately upon request.
Failing to adjust to these updates can expose your company to audits, fines, and even criminal charges. Here’s what you need to know about the 2025 Form I-9 updates and the specific actions you should take to protect your business.
What is Form I-9?
Before we talk about Form I-9 updates, let’s quickly go over the basics of Form I-9.
Form I-9, officially called the Employment Eligibility Verification form, is a mandatory document that all US employers must complete for every new hire. Its purpose is to verify an employee’s identity and confirm their legal authorization to work in the United States.
Employers are responsible for ensuring that Form I-9 is properly completed, stored, and made available for inspection if audited. Failure to comply with Form I-9 requirements can lead to substantial fines, legal action, and reputational damage.
Form I-9 updates: New edition date and expiration
The latest Form I-9 has an edition date of 01/20/25 and is valid until its expiration date of 05/31/2027.
If you’re still using the 08/01/23 version, it’s valid for now. However, if you use digital onboarding, your electronic systems must reflect the new expiration date by July 31, 2026.
Why it matters:
- Using an outdated form during hiring can lead to technical violations during an I-9 audit.
- Even minor paperwork mistakes can result in fines, around $272 to $27,018 per violation, depending on the severity.
- If ICE (Immigration and Customs Enforcement) audits your business and finds outdated forms, it could trigger deeper investigations into your hiring practices.
Tip: Even if your hiring processes are manual, transitioning to the new Form I-9 now ensures accurate employee records, strengthens compliance, and minimizes exposure during future audits.
New wording: “alien authorized to work”
Employees who aren’t US citizens but are authorized to work used to check a box labeled “noncitizen authorized to work.” Starting April 3, 2025, the correct label is “alien authorized to work.” This update impacts both the Form I-9 and E-Verify systems.
Common mistakes to avoid:
- If you continue selecting the old terminology in E-Verify after April 3, your cases could be delayed or rejected.
- Always match the correct wording based on the latest form edition your employee completed.
Tip: Train your HR or bookkeeping and payroll staff now to spot and select the updated status to keep onboarding running smoothly.
Updated description for list B identity documents
Two common List B documents, state-issued driver’s licenses and government ID cards, now describe personal information differently. In the recent form I-9 updates, the word “gender” has been replaced with “sex.” The documents accepted haven’t changed, but the wording now matches other federal documentation standards.
Be mindful of the following:
- If your internal hiring checklists, instructions, or training materials still mention “gender,” update them.
- Small inconsistencies during an audit can raise red flags about the accuracy of your onboarding process.
Tip: Review your employee onboarding packets and HR templates now to stay aligned.
DHS privacy notice
The DHS Privacy Notice is a new section added to the Form I-9 instructions to explain what happens to an employee’s personal information after it’s collected.
Specifically, it tells employees:
- Their Form I-9 information (like name, date of birth, immigration status, etc.) can be shared with other government agencies.
- The information can be used for law enforcement purposes, audit investigations, immigration enforcement, or national security investigations.
- DHS and the Social Security Administration may verify the information for accuracy through their databases.
For employers, this matters because:
- You are legally required to keep Form I-9s on file and present them if requested by DHS, ICE, or other agencies during an inspection.
- You must inform employees about the recent form I-9 updates and that their data can be used by federal agencies if needed.
Tip: Make sure employees have access to this information upfront during onboarding, not buried in fine print later.
The bottom line
For many small business owners, it’s easy to feel like you’re constantly playing catch-up, trying to stay ahead of changing payroll regulations, balancing the demands of running your business, and keeping your team on track. Add to that the fear of costly fines or I-9 audits, and it’s no wonder compliance feels like another burden to bear. But with the right systems in place, you can manage I-9 compliance and stay audit-ready.
CoCountant can build the right financial management systems for your business.
Our bookkeeping and payroll services help small business owners stay ahead of these regulatory changes. From ensuring accurate I-9 form processing to managing payroll taxes, benefits, deductions, and taxes, our QuickBooks-certified team handles it all. On top of that, we track every transaction, classify employee expenses correctly, and reconcile your payroll accounts, so you never have to worry about missing a detail or facing penalties due to bookkeeping mistakes.
We take care of every detail so your employees are paid correctly and on time and your business stays compliant with federal, state, and local regulations.
FAQs
Can I accept digital copies of documents for Form I-9 verification?
No. Employers must examine original hard copy documents presented by the employee to verify identity and employment authorization. However, if you’re enrolled in E-Verify and meet specific criteria, you may be eligible to use remote document examination procedures.
How long do I have to keep I-9 forms on file?
You must keep each employee’s I-9 for three years after the date of hire or one year after the date employment ends, whichever is later. After that, you can securely dispose of it.
Do remote employees need to complete a Form I-9, too?
Yes. All employees (on-site, hybrid, or remote) must complete a Form I-9. If remote, you can use authorized representatives (like a notary or third-party service) to verify documents in person.
