The Basics
- The construction industry faces unique I-9 compliance challenges due to factors like high turnover, seasonal hiring surges, and subcontractor management.
- Previously, many mistakes made on I-9 forms triggered a grace period, allowing for corrective action. Now, many of those same mistakes trigger violations with immediate financial penalties for employers.
- To safeguard against operational disruptions and massive financial risk, construction companies must prioritize proactive measures like internal audits and standardized response protocols.
The New Era of I-9 Enforcement
For years, many construction firms viewed Form I-9 management as a back-office formality — a compliance hurdle that, if stumbled over, could usually be cleared with a quick correction following a small grace period. But in 2026, that “grace period” era has officially ended.
Immigration and Customs Enforcement (ICE) more than doubled its personnel in the last 4 months of 2025, adding roughly 12,000 officers and agents and deploying them nationwide, “actively supporting enforcement operations, including arrests, investigations, and removals.”
The impact on the construction has been immediate and substantial. In the first quarter of 2026 alone, the construction industry accounted for 34% of all workplace audits, the highest of any sector.
The surge is fueled by a “zero-tolerance” policy and a quiet but devastating regulatory shift in Form I-9 compliance standards. Namely, many clerical errors that were once considered “correctable technicalities” are now classified as substantive violations. This means that a missing signature date or an outdated form version no longer triggers a warning; it triggers an immediate fine.
The step-up in enforcement and shift in standards begs the question: Is your construction company prepared for an unannounced visit from ICE?
In this article, we’ll explain why construction companies are particularly vulnerable to I-9 compliance risks, what you need to know about the changing enforcement landscape, and what you can do to protect your construction business.
Construction’s Unique I-9 Risks
The construction industry operates within a perfect storm of compliance challenges that make it a primary target for federal oversight. Several factors converge to make construction companies especially vulnerable:
- Seasonal and Temporary Labor: The heavy reliance on seasonal and temporary labor creates a revolving door of personnel, where the sheer volume of new hires significantly increases the probability of clerical errors or missed deadlines in a high-turnover environment.
- Subcontractors: The industry’s tiered workforce structure compounds the complexity of compliance. Prime contractors can often find themselves under scrutiny for the documentation failures of their partners, and ICE often looks for “constructive knowledge,” meaning if a contractor should have known a sub wasn’t compliant, they can be held liable.
- Job-site Vulnerabilities: Unlike office-based businesses, active job sites provide high visibility and physical accessibility, making them uniquely vulnerable to disruptive, on-site ICE actions that can halt production and trigger immediate inspections.
Employment Eligibility Verification: What’s Changed
Traditionally, ICE deemed many errors on I-9 forms as technical or procedural and given employers a grace period to correct the mistakes. Now the agency treats nearly a dozen of the most common I-9 mistakes, such as a missing or undated employer or employee signature, as substantive violations.
Rather than offering a window for rectification, the agency is bypassing grace periods and, upon discovery of certain violations, imposing immediate fines.
The penalties can add up quickly. For simple paperwork errors, the fines range from $288 to $2,861. And those fines are assessed on a per-form basis; not per organization.
If investigators uncover intentional or recurring violations, the stakes rise to more than $28,000 per worker. When calculating your risk potential, remember that these penalties apply to every single employee on your payroll.
A Real-world Crisis Averted
The Rehmann HR Solutions team recently conducted an I-9 audit of a construction company with 61 employees. Of those 61 employees, 17 did not have an I-9 on file, 26 had errors that need correction in Section 1, 43 had errors in Section 2, and 36 were completed on expired forms. If ICE were to discover these errors during an audit, the fines for that construction company would have reached $100,000 or more.
This case serves as a stark reminder that severe financial and operational disruptions often happen not because an organization intentionally breaks the law, but because leadership simply didn’t know what they didn’t know. The good news? Determining if your company is lacking in I-9 forms or has errors on its forms is largely a matter of implementing a proactive strategy like the one below.
Proactive I-9 Compliance Strategy for Construction Companies
- Perform Regular I-9 Audits: Don’t wait for a Notice of Inspection (NOI) to discover your missing signatures. Conduct neutral, internal audits quarterly or bi-annually. Address errors and missing documentation before ICE inspections.
- Streamline Subcontractor Management: In construction, you are often only as compliant as your weakest subcontractor. Implement processes to verify subcontractor compliance. While you cannot legally complete I-9s for your subcontractors’ employees (doing so could trigger “joint employer” liability), you can require subcontractors to provide written certification that they have a compliant I-9 on file for every worker they bring.
- Train Key Staff: Company front desk staff, HR personnel, and in-house and job site managers and leaders should know how to complete I-9s correctly, be aware of common mistakes, and how to respond effectively if ICE arrives.
- Develop a Response Protocol: Create a clear plan for responding to an NOI or ICE actions at active job sites.
Your Takeaway
For a mid-sized contractor, a systemic paperwork error across the payroll isn’t just a headache — it’s a multi-million dollar liability that can materialize with just three days’ notice.
And while an office audit is a paperwork headache, a job site action, where time is quite literally money, can be a logistical nightmare. A single morning of halted production can push back project milestones, leading to cascading delays that trigger liquidated damages clauses in your contracts. These penalties, often calculated daily, can quickly eclipse the cost of the actual ICE fines.
Construction companies must prioritize I-9 compliance to avoid financial and operational disruptions. By addressing vulnerabilities and implementing proactive measures, you can protect your business and workforce. Don’t wait for an ICE audit — schedule a compliance review with Rehmann HR Solutions today.
Frequently Asked Questions
Q: We have project managers working remotely. Can we use the new DHS “Alternative Procedure” video review for their I-9s?
A: Yes, but only if your company is enrolled in E-Verify in good standing. Under the new March 2026 guidelines, if you use remote video review without being enrolled in E-Verify at the time of hire, the verification is considered invalid.
Q: What is the most common mistake when using the remote verification process?
A: Failing to properly annotate the form. When you review documents via live video, you must check the box indicating you used the “alternative procedure” in the “Additional Information” field of Section 2. If this box is left blank, ICE will treat the I-9 as if the documents were never physically examined, triggering an immediate fine—even if the worker is fully authorized.
Q: What happens if ICE shows up at a job site and the person authorized to handle I-9s is at the home office?
A: This is a common issue for contractors as agents may attempt to interview workers or enter non-public areas immediately. This is why it’s important to train site managers to ask for a judicial warrant (signed by a judge) before allowing access to private trailers or fenced-off zones. Without a warrant, you have a right to deny entry to private areas until your designated compliance officer or legal counsel arrives.