Form I-9: What Is It and Changes in 2023

Form I-9: What Is It and Changes in 2023
If you run a company with employees, you must know about Form I-9 and recent changes to this required government form. With significant changes to the I-9 required in 2023, it’s as important as ever to brush up on how to use the I-9 and what’s required.
by Eric Rosenberg Nov 22, 2023 — 4 min read
Form I-9: What Is It and Changes in 2023
This article is for educational purposes and does not constitute legal, financial, or tax advice. For specific advice applicable to your business, please contact a professional.
 

If you run a company with employees, you must know about Form I-9 and recent changes to this required government form. The I-9 is used for employment eligibility verification. In other words, the I-9 is required to ensure your new hires are authorized to work legally in the United States.

With significant changes to the I-9 required in 2023, it’s as important as ever to brush up on how to use it and what’s required. Here’s a closer look at what you need to know about the new I-9 form for 2023 and beyond.

Why Form I-9 is important for small business owners

Form I-9 is mandatory for all U.S. employers, including small businesses, to verify their employees’ identity and employment eligibility in the U.S. Failure to maintain accurate I-9 records can result in fines and inspections by government officials. The form must be kept on file for all current employees, and after an employee terminates for another three years from the hire date or one year from the termination date, whichever is later.

Non-compliance comes with hefty penalties ranging from civil fines to criminal charges. Fines per incorrect form can range from $252 to $2,507 for 2023 and increase annually with inflation, and knowingly employing unauthorized workers can result in even higher fines and debarment from government contracts. These financial setbacks can be devastating for small businesses operating on thin margins.

Beyond legal imperatives, Form I-9 plays an essential role in HR operations. Inaccurate or incomplete forms can bog down the onboarding process and lead to administrative inefficiencies. In contrast, a well-managed I-9 process can streamline HR workflows and enable smoother business operations.

Summary of I-9 changes in 2023

You’ll notice that the required I-9 sections are now only one page long, shorter than the older version. Instructions are about half as long, making them easier to read and understand. Remote employee verification is now permissible for employers that use the E-Verify system. Here’s a closer look at the changes.

A closer look: What’s new and why it matters

1. Simplified layout

Compared to the old I-9, the new version puts the required sections on a single page. Sections for preparers/translators and rehires are now standalone supplements. Instructions are reduced from 15 pages to eight pages.

2. Remote verification option

Employers participating in the federal E-Verify program can review an employee’s documents electronically, rather than in person. The I-9 document verification can now take place using a live video call.

3. End of COVID-19 flexibilities

The national COVID emergency came with an option for remote verifications from March 2020 to July 2023. The alternative procedures are no longer available.  If your company is enrolled in the E-Verify system you can continue to conduct remote verifications.   Employers who used the COVID-19 flexible remote verification process must complete an in-person physical document examination or perform a new verification according to the new regulations by August 30, 2023.

4. New checkboxes and fields

The form is updated to be more easily completed as a fillable form on mobile devices or tablets, so it’s easier for employers to meet requirements on the go. As noted above, E-Verify employers can use a new checkbox for the remote verification process rather than in-person.

5. Reduced instructions

Cutting from 15 pages to eight pages is nearly a 50% reduction. The reduction is a nice reprieve when the government is known for offering extremely lengthy and complicated forms and instructions.

Practical steps for transitioning to the new form

Now that you understand the changes to the I-9 in 2023, it’s time to assess how to update your procedures to ensure you remain in compliance.

Review existing procedures

Start by reviewing your current I-9 procedures to ensure you’re in compliance. You should have an I-9 on file for every current employee, and those rules are not changing. Double-check your files and fill in any gaps. If you have an HR manager, check in to ensure you know how they handle I-9 verification. If you’re managing new employee onboarding, give the new instructions a detailed read.

Training and communication

Train yourself and anyone responsible for I-9 verification on new rules and procedures. Per the new guidelines, if your company is enrolled in E-Verify, remote verification is allowed. 

E-Verify enrollment

E-Verify opens up a new route for your business to complete I-9 requirements. Your business can enroll at e-verify.gov. You’ll need to create an account, answer questions about your business, and agree to E-Verify terms and conditions. There’s no cost to enroll, so signing up can be a good idea if you suspect you may ever need to use E-Verify.

Tip: E-Verify uses government databases to match names, tax ID numbers, and ID photos to existing records to confirm an individual is eligible to work in the United States.

Compliance and documentation

Form I-9 must be completed within three business days of hiring a new employee.  Complete I-9s  should be maintained as required. That’s means you should have a completed I-9 on file for all current employees.  Once an employee terminates, maintain the I-9 for a minimum of three years after the hire date, or one year after termination, which ever is later. Going forward, maintain the same records with the new form and any digital records from E-Verify.

If the government requests a copy of your I-9 records, you must be able to hand them over within three business days.

If you’re unsure if your business is following the proper process for I-9 verification, consider consulting with a trusted legal professional.

What to do if you’re still using the old form

If you’re still using the old I-9, it’s time to transition as soon as possible. The last day businesses can legally use the old I-9 is October 31, 2023. Starting November 1, 2023, all companies must use the new I-9.

Fortunately, the new form is easier and more streamlined than the old version, so the transition shouldn’t be too difficult.

Beginning November 1, 2023, only the new Form I‑9 dated 08/01/23 may be used.

How Square can help

Square Payroll helps with onboarding and staying compliant with W-4 requirements, payroll taxes, and automating deductions and payroll cycles. It allows you to run your payroll with a mostly hands-off approach, just checking in to approve hourly payroll and review tax forms for accuracy.

For new hires, Square offers HR Manager, a suite of document templates, resources, and alerts to help you remain compliant. For an added fee, Square Payroll customers can upgrade to get additional HR support by phone or email and an employee handbook builder.

Square Payroll and HR Manager come together to give you a full suite of tools and services to manage your workforce efficiently.

Staying compliant with the new I-9

Staying compliant with I-9 regulations is the law, and even if you’re not checked regularly, getting caught with an I-9 violation can lead to thousands of dollars in fines. Thankfully, the new I-9 is shorter and more straightforward and permanently opens up remote verification for  E-Verify employers. That’s a big win for small businesses.

Eric Rosenberg
Eric Rosenberg is a financial writer, speaker, and consultant based in Ventura, California.

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