A construction site runs on tight schedules and skilled hands, but its true foundation is legal compliance. Getting it wrong isn’t just an administrative headache—it’s a risk that can stop a project cold and threaten your entire business. Verifying a worker’s legal right to work is now a core part of risk management, not just a box to tick.
The rules are getting stricter. Gone are the days of only worrying about high-profile raids. Now, U.S. Immigration and Customs Enforcement (ICE) focuses on steady, widespread Form I-9 audits, hitting companies with fines for every mistake. For contractors who depend on subs and a flexible workforce, the exposure is huge. This guide walks you through what you need to know to build a hiring process that will hold up under scrutiny in 2025 and 2026.
Understanding Your Basic Legal Duties
Everything stems from the Immigration Reform and Control Act (IRCA) of 1986. Failing to comply isn’t a simple error; it’s a federal violation. The core duties seem straightforward but have important details:
First, you must complete and keep a Form I-9 for every single person you hire for paid work. That means full-timers, part-timers, seasonal help, and temporary labor. You need to hold onto each form for three years after the hire date or one year after employment ends, whichever is later.
Second, you have to physically check the original, unexpired documents the employee provides to prove their identity and work authorization. You can’t ask for specific documents like a Green Card.
Third, you must apply these rules the same way to everyone. Discriminating based on someone’s background or asking for extra documents from people you suspect might not be authorized is just as illegal as knowingly hiring someone without papers.
The financial stakes are clear and growing. In 2023, ICE conducted thousands of audits leading to millions in fines. These penalties are adjusted for inflation, so they keep climbing.
| Violation Type | Potential Fine (2024 ranges) |
|---|---|
| Paperwork mistakes on Form I-9 | $272 to $2,701 per form |
| Knowingly hiring or keeping unauthorized workers | $583 to $23,727 per worker |
Remember, these are per-instance fines. A medium-sized company with 100 employees could easily face a penalty in the hundreds of thousands from one audit.
The Step-by-Step Verification Process
Getting this right is a careful process with strict timing, blending paper forms and digital checks.
Part 1: The Form I-9
The employee must complete Section 1 no later than their very first day of work. A common pitfall is letting a foreman or recruiter fill it out for them—this invalidates the form. Then, you have three business days to complete Section 2. This is where you physically examine the original documents. A key post-pandemic change: the blanket flexibility for remote inspection ended in mid-2023.
If you’re hiring someone remotely for a job in another state, you have two compliant paths. You can use a trained “authorized representative,” like a notary or a local site supervisor, to do the physical check for you (but you’re still responsible for their work). Alternatively, if you’re enrolled in E-Verify and in good standing, you can use the government’s optional Alternative Procedure, which allows for remote inspection via live video call.
Part 2: E-Verify
Think of E-Verify as a digital backup, not a replacement for the I-9. Federally, it’s mandatory if you have certain federal contracts. But for construction, state laws are the main driver. The requirements are a patchwork:
| State | E-Verify Requirement |
|---|---|
| Arizona & Mississippi | Required for all employers |
| Florida | Required for employers with 25+ employees |
| Georgia | Required for employers with 10+ employees |
| Alabama | Required for employers with 5+ employees |
| Texas | Required for public employers; often required for private contractors on public projects |
After finishing Section 2 of the I-9, you create a case in E-Verify. Most checks come back instantly as “Employment Authorized.” If there’s a mismatch, you’ll get a Tentative Nonconfirmation (TNC). You must notify the employee, who has the right to contest it. Crucially, you cannot fire, suspend, or penalize them while they are challenging the result.
Construction-Specific Risks and How to Handle Them
The way construction works—decentralized and project-based—creates unique compliance holes.
The biggest risk is joint-employer liability. Courts can hold a general contractor responsible for the I-9 violations of their subcontractors. ICE has explicitly said it will target companies up the contracting chain. Your best defense is to put ironclad clauses in your subcontractor agreements. Require them to provide proof of E-Verify enrollment, certify their workers are verified, and give you the right to audit their I-9 files for workers on your projects. Understanding the risks of using unlicensed subcontractors is also crucial here.
Then there’s the “field hire” problem. A superintendent needs a laborer immediately, and the paperwork gets pushed to tomorrow. This is a direct violation. The fix is to delegate authority. Train trusted site supervisors as authorized representatives and use a secure digital I-9 platform so they can complete the verification right on-site, correctly and immediately. The best payroll setup for mobile construction crews often integrates with these systems.
Document fraud with fake Green Cards or Social Security cards is also common. You’re not expected to be a forensic expert, but you should be vigilant. Use the free training guides on the USCIS I-9 Central website to learn how to spot obvious forgeries. The key is to apply the same level of scrutiny to every single hire.
What’s Coming in 2025-2026: Trends to Watch
The compliance landscape is shifting toward more enforcement, more technology, and more complex state laws.
- More “Silent Raids”: ICE’s audit strategy is effective and likely to expand. The construction industry remains a prime target.
- A Thicker Patchwork of State Laws: More states may follow Florida’s lead with their own verification rules. If you work in multiple states, you’ll need to comply with the strictest law to stay safe everywhere. This makes navigating multi-state licensing a key skill.
- Technology is Now Essential: Paper I-9 binders are a liability. Integrated digital platforms that handle I-9s, retention schedules, and E-Verify are becoming the standard. They create the clear audit trail you need if investigators come knocking. Explore the benefits of construction project management software for this purpose.
- Increased Agency Cooperation: ICE, the Department of Labor, and OSHA are sharing information more than ever. A routine safety inspection could now easily lead to an I-9 audit. Ensure you understand common OSHA violations in construction to minimize this risk.
The Real Cost of Getting It Wrong
Beyond the fines, the consequences multiply. For public works contractors, a pattern of violations can lead to debarment—losing the right to bid on state or federal projects, which can be a death sentence. Your reputation with lenders, clients, and bond providers can take a major hit. And in the worst cases, a “pattern or practice” of knowingly hiring unauthorized workers can lead to criminal charges, including asset seizure and even prison time for company leaders. This is why a solid construction business plan must include robust compliance strategies from the start.
Your Action Plan for the Next Two Years
Don’t wait for an audit letter. First, conduct a proactive self-audit with an immigration attorney. This lets you find and fix errors under legal privilege. Second, centralize your process. Designate a compliance point person and invest in a digital I-9/E-Verify management system that can handle remote hires. Third, vet your subcontractors’ compliance as rigorously as you vet their safety records. Make it part of your bid selection and contract management. If you’re just starting, ensure you know what licenses you need and what insurance is required.
Fourth, train your team—everyone from the office to the job site—annually on I-9s, E-Verify, and anti-discrimination rules, and document that training. Finally, stay informed. Rules change. Subscribe to updates from USCIS, ICE, and your state’s labor department to ensure your processes aren’t left behind. For entrepreneurs, reviewing a commercial construction business plan example can show how leading firms integrate compliance into their operations.
This information is for guidance purposes and is not legal advice. Laws and penalties change. Consult with a qualified attorney for advice tailored to your specific business and location.
Frequently Asked Questions
I-9 compliance is verifying a worker's identity and employment authorization within three business days of hire. In construction, rapid, decentralized hiring and high turnover turn this into a high-stakes risk for fines, project disqualification, and lawsuits.
Construction's project-based, rapid hiring managed by field supervisors creates a 'documentation gap.' The multi-tiered subcontractor model also diffuses responsibility, making general contractors liable for their subs' verification failures.
A single error can replicate across many hires, creating a violation pattern that triggers ICE audits. Beyond fines, poor compliance history can jeopardize bonding, insurance, and bidding eligibility for future projects.
Document abuse is illegally rejecting a valid work authorization document or demanding specific documents from certain workers. This constitutes discrimination and can lead to charges from the Department of Justice.
A laminated Social Security card is invalid per USCIS guidance, even if legitimate. Accepting it can lead to penalties, while rejecting it without cause may be document abuse.
An expired EAD paired with a timely-filed renewal application (Form I-797C) is considered unexpired during an automatic extension period. Knowing this nuance is critical for correct verification.
Yes. A driver's license marked 'Not for Federal Identification' is still a perfectly valid List B document for I-9 purposes. Rejecting it is a violation.
E-Verify is an online system to confirm employment eligibility. Mandates vary by state, applying to all employers, public contractors, or businesses of a certain size. Non-compliance can bar you from public work and some private contracts.
These are conditional requirements buried in project bid documents or grant agreements, not just state law. They may apply only to specific projects or funding sources, creating a fragmented compliance landscape.
An authorized representative can inspect documents via live video interaction. The physical documents must still be examined within three business days of hire, with the entire process meticulously documented.
Reverification is required when a worker's employment authorization document expires. This is critical for visas like H-2B or statuses like asylum applicants with EADs, where extensions have specific rules.
Prepare by centralizing I-9 storage, creating a designated audit response team, conducting quarterly self-audits, and integrating verification with safety onboarding. A fast, organized record production establishes credibility.
