Beginning a new business is exciting but it comes with responsibilities beyond building a product or service. One area that many founders overlook until after it’s too late is I-9 compliance. Verifying employment eligibility is not only a bureaucratic task, but a legal requirement by the federal government. Non-compliance can lead to substantial fines, auditing, or reputational damage that jeopardizes your start-up’s growth.
For founders and early-stage entrepreneurs, having an understanding of I-9 verification is important from the first day. Whether you’re bringing on your first employee or scaling to a distributed team, incorporating a solid verification process will ease compliance for your company and create the structure for compliant growth moving forward. This guide will summarize the key points, highlight potential pitfalls, plus provide information on how a trustworthy I-9 verification solution can help make I-9 compliance simple for start-ups.
I-9 Verification Basics: What Founders Need to Know
Federal law mandates that all U.S. employers verify the identity and employment eligibility of each employee. It all begins with Form I-9 that must be completed for every new hire, with no exceptions.
Some important requirements to note:
- The three-day completion window: Employers must complete Section 1 on or before the first day of work; Section 2 must be completed within three business days of hire.
- Employer responsibility: Employees will present documents, but employers are responsible for completing forms accurately and to ensure that all forms have been completed.
- Document review: Employers must review and inspect original documents establishing identity and work eligibility status. Photocopies are permissible only in certain circumstances.
Recognizing and absorbing these fundamentals will be useful for founders for preventing mistakes that can result in fines, or exposure to audits.
The Most Common I-9 Mistakes Startups Make
Due to the speed at which hiring takes place, small teams, and fewer people experienced in compliance, startups tend to make many errors. Typical mistakes are:
- Delaying I-9 completion: It’s tempting to wait to complete the I-9 forms until HR has time, but doing so may result in a missed deadline.
- Completing Section two incorrectly or missing signatures: Other missing signatures or unfilled fields are often among the most common auditor findings.
- Accepting wrong combinations of documents: Employers have to strictly adhere to the authorized document lists.
- Failing to reverify work authorization that expired: Some employees require work authorization to be verified periodically.
- Storage: I-9s must be stored out separate from the personnel record.
- Document taking: Making unauthorized copies or not making a copy when required may trigger an issue.
Even small mistakes can lead to significant consequences for early-stage companies.
Real Penalties That Can Hurt Your Startup
Violating the law can be quite costly. ICE fines are $281.00 to $2,789.00 for each Form I-9 violation and repeated violations can lead to additional enforcement and penalties such as shutting down your business.
Additional risks include:
- IRS audits regarding inconsistent documentation
- Claims of discrimination if verification is not conducted consistently
- Interruption in business or loss of investors due to legal complications
For founders, it is not just a financial cost: it is the strength and credibility of your venture.
Setting Up I-9 Compliance for Your Growing Team
A proper setup will ensure compliance right from the start. Best practices include:
- Completing on time: Have I-9s completed the first day of work or prior.
- Remote hiring: Use remote I-9 verification options if the employee is not on-site.
- Authorized representatives: Trustworthy representatives can complete section two if founders are unavailable.
- Storage rules: I-9s must be stored for three years from the hire date or for one year from the termination date, whichever is later.
Having structured workflows in place now will avoid headaches later on as you grow your team.
I-9 Compliance for Remote and Distributed Teams
Working remotely provides conditions that create unique hurdles.
- Document Verification: The founders are permitted to designate an authorized individual to review documents.
- Flexibility Provisions: The law permits some temporary modifications, but founders should be aware of the limits of those modifications.
- Multi-State Compliances: Even small teams will need to consider the location of the employee, and what rules apply to each state.
Scalable compliance considers that remote work arrangements do not need to create legal exposure.
Smart Technology Choices for Startups
Manual compliance is risky and time-consuming. Early investment in an I-9 verification solution is often the smartest choice for growing startups. Features to look for include:
- Integration with applicant tracking and onboarding tools to streamline workflows
- Automated error checks to reduce manual mistakes
- Compliance guidance and audit trails to prepare for future inspections
Symmetry Software provides a cloud-based platform designed for startups, offering secure, simple, and compliant I-9 management from hire to audit.
Building Compliance Into Your Company Culture
Embedding verification into your culture reduces risk and ensures consistency:
- Make I-9 completion a core part of onboarding
- Train managers and team leads on proper procedures
- Document every step and maintain records centrally
- Review processes regularly as your team grows
A culture of compliance builds trust internally and externally.
Red Flags That You Need Professional Help
Founders should seek guidance when:
- Ten or more employees have been onboarded without proper I-9 completion
- A Notice of Inspection from ICE arrives
- Uncertainty exists around visa holders or foreign nationals
- Preparing for fundraising due diligence
Recognizing issues early prevents penalties and reputational damage.
Quick Action Checklist for Founders
Immediate steps:
- Ensure all current employees have completed I-9 forms correctly
- Verify storage and retention practices
- Address any missing or incomplete documentation
30-day compliance improvement plan:
- Audit existing I-9s
- Train team members on verification requirements
- Implement a technology solution for automation
Ongoing compliance:
- Schedule periodic reviews
- Update processes as laws or workforce distribution changes
- Keep detailed records for potential audits
Final Thoughts
When building a startup, compliance is a must-have. If you choose to take on I-9 verification, compliance will help protect you from fines, audits, and operational risk, which will help your organization grow. Using a structured workflow, leveraging smart technology, and building a culture of accountability in your startup will help founders conduct the appropriate employment verification from the first hire, which is already a key step in building a solid, compliant, and sustainable business. Explore Symmetry Software on I-9 verification to simplify compliance and safeguard your startup.
