How To Conduct an Internal I-9 Audit

The I-9 Form is a key part of employment compliance in the United States. It is designed to verify that employees are legally authorized to work. Introduced under the Immigration Reform and Control Act of 1986, its purpose is simple but non-negotiable: to ensure businesses hire individuals who meet federal work eligibility standards.

Compliance with this mandate is your legal obligation, and failure to uphold it carries significant risk. An internal I-9 audit is a necessary measure to identify and rectify compliance issues.

This process involves reviewing completed forms, verifying the authenticity of documentation provided by employees, and addressing discrepancies or omissions. Regular audits will keep your business in good shape and reduce the risk of penalties.

What Do You Need To Review in an I-9 Audit?

Non-compliance is dangerous. Penalties range from financial fines to intrusive government audits, and worse, they erode reputation and employee trust. An I-9 audit is your opportunity to resolve errors quietly before regulators compel you to do so loudly. Failing to act can invite scrutiny and risk avoidable exposure.

Approach an I-9 audit with care and attention to detail. A proper audit begins with a methodical review.

Your compliance checklist is as follows:

Verify Every Current Employee

Every employee hired after November 6, 1986, must have a properly completed Form I-9. Ensure that all required sections are filled out entirely and accurately. You will need to verify your current employees and it is also good practice to check employee records as well.

Scrutinize Section 2 Documents

Review the documents provided by employees. They must not only meet I-9 eligibility requirements but also be unexpired and free of any appearance of inauthenticity.

Identify Common Errors

Incomplete fields, missing signatures, inconsistent dates are mistakes to check for and should never be present in a professional organization.

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What Employees Need To Be Audited?

To efficiently address gaps, you need to know where to look. Here are the main areas to review:

Current Employees

Missing or inaccurate forms for active employees are compliance failures waiting to happen. This is non-negotiable.

Terminated Employees

Record Retention is not optional. Forms must be kept for three years after hire or one year after termination, whichever is later.

Pre-1986 Hires

Pre-1986 employees are exempt from I-9 requirements and are thus irrelevant to an I-9 audit.

Anything less than a structured approach can leave your business vulnerable. An audit is a preventative measure, but it also serves as an investment in insulating your organization from unnecessary exposure. With this in mind, you should handle your audit with care.

How To Prepare for the Audit

Preparation can make the difference between compliance and chaos. A careful approach will avoid wasting any time and eliminate the risk of errors. Begin with precision, stay organized, and let nothing slip through the cracks.

Step 1: Gathering Documents

The foundation of any successful I-9 audit is knowing what you’re working with, so it’s important to compile a complete list of employees and their corresponding I-9 forms.

Here’s what you need:

All current employees hired after November 6, 1986.
Terminated employees whose forms still fall within the mandated retention period.

Once you’ve gathered this information, cross-reference it with your employee roster. Don’t assume — verify. Missing a single form starts with oversight but can quickly turn into negligence.

Step 2: Organizing Files

To avoid confusion (or excuses), separate I-9 forms into two distinct categories:

Current Employees: These are your top priority. Review and correct these forms first, as non-compliance here is a glaring vulnerability.
Terminated Employees: Review these for accuracy and flag any signs of mistakes.

This categorization isn’t busywork. It ensures your review is streamlined and avoids the mess that comes with a haphazard process.

Step 3: Using the Right Tools

A proper audit requires more than a clipboard and good intentions. Use an organized system or software to track progress, flag issues, and document corrections. Have the USCIS I-9 Handbook for Employers on hand. It’s admittedly dense, but will be your friend throughout this process.

If you encounter errors, handle them with the proper process to mitigate penalties.

Look for a few key slip-ups:

Missing information: Ensure there are no blank fields in Sections 1, 2, or 3–names, dates, and signatures must be filled in.
Incorrect document entries: Documents in Section 2 must match their designated categories (List A, List B, or List C). The correct selection of documents must be accurate and active for each employee.
Expired work authorization: Reverify any expired work authorization with haste.

How To Correct Errors

Correcting mistakes isn’t difficult if you know what you’re doing. Again, take care to address each problem correctly and document it properly.

Distinguish the error type: Minor mistakes (technical errors) can often be corrected on the original form. Significant issues (substantive errors) may require a new I-9.
Make corrections clearly: Use a different ink color. Initial and date each change. If you can’t do this without making the form hard to read, start over.
Attach explanations: Substantive corrections require a memo. Document what went wrong, how you fixed it, and why it won’t happen again.

Step 4: Creating an Audit Log

Your audit log is no mere checklist. The fact is, it’s your evidence of good-faith compliance.

Here, you need to include:

Employee names.
Errors identified.
Steps taken to correct each issue.

A sloppy log is easily avoidable if you put in the effort to correct any mistakes made along the way. Done properly, it could save your business significant penalties — or at least soften the blow.

How To Address Missing or Expired Documentation

Missing or expired documentation is a compliance headache waiting to happen. Left unchecked, it becomes a glaring liability — one that regulators won’t overlook. Fix it, and fix it properly.

Missing I-9 Forms

Missing forms are unacceptable. If this applies to you, here’s the process:

Contact Employees Directly: Notify employees about the missing required forms. Make it clear and provide the reasoning or documentation substantiating your request.
Set a Deadline: Give a firm but reasonable timeframe for submitting the necessary documents. Follow up to answer any questions and ensure you receive the correct forms in time.
Document Every Interaction: Every email, phone call, and meeting should be logged. Regulators care about evidence and your diligence can help resolve issues that arise.

Expired Work Authorization

An expired work authorization is not “something to get around to.” It’s a compliance grenade you want to disarm immediately.

Reverify Eligibility: Employees must provide updated documentation. Update Section 3 or complete a new I-9 as needed.
Know When to Leave It Alone: Some expirations, like those for permanent resident cards, don’t require re-verification. Consult the USCIS I-9 Handbook before overcorrecting.

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What Are the Obligations for Terminated Employees?

Employment might end, but your responsibilities do not. Form I-9 retention is a legal mandate.

Retention Requirements

For terminated employees, retention rules are straightforward:

Three years from the date of hire
One year from the date of termination
Whichever is later

Tracking these time frames properly is important. Keep the forms longer than required, and you risk violating privacy laws. Discard them too early, and you’re in breach of federal regulations. Empower your team with the right system and protocols to handle these documents correctly and with confidence.

Auditing I-9s for Terminated Employees

When reviewing forms for former employees:

Correct What You Can: Errors like missing hiring dates can be fixed — initial and date the correction.
Log What You Cannot: Mistakes requiring the employee’s input, like unsigned sections, are now permanent flaws. Note them in your audit log.
Dispose Securely: Retention period expired? Shred or otherwise destroy the forms securely to avoid a breach of sensitive data.

How To Finalize and Document Your I-9 Audit

The final step of an I-9 audit is proper documentation.

The Audit Log: Your Compliance Shield

A detailed audit log is key to success. Your log must include:

Employee Name
Errors Identified
Actions Taken
Unresolved Issues

For mistakes that couldn’t be corrected, include an explanation to demonstrate diligence.

Explanatory Memos: Covering Your Bases

Significant corrections require a memo. Attach one to the affected I-9, detailing:

The problem identified
Why it occurred (if known)
How it was corrected

If an active employee’s I-9 was missing and completed during the audit, your memo should state this clearly, alongside the steps you’ve implemented to prevent it from happening again.

How Does Mosey Simplify Compliance?

Conducting an internal I-9 audit is crucial for employment compliance, as it verifies that your current employees are, in fact, authorized to be working — and failing to comply with these obligations can lead to hefty fines and penalties.

If you’ve tried to piece together a compliance solution, you have likely encountered disjointed processes, vague promises, and plenty of manual guesswork.

Business compliance can be tricky, but with Mosey, you can streamline and automate tasks. Stay on track with changing requirements and deadlines, all in one platform — book a demo with Mosey today.

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