As a staffing agency, it’s essential to get Form I-9 compliance right.
Do independent contractors need to complete an I-9?
When exactly must the form be completed?
How long should you retain I-9 records?
These are the kinds of questions every agency must be able to answer with confidence, since employment eligibility verification isn’t optional—it’s a legal requirement.
What’s a Form I-9?
Form I-9 is the federal document employers must use to verify a worker’s identity and employment authorization in the United States. It applies only to individuals classified as employees, those who receive a Form W-2 for tax purposes. Independent contractors, paid via 1099, aren’t required to complete an I-9.
Want a deeper dive? Check out our blog post: The Ultimate I-9 Form FAQ.
Where to Submit Form I-9
In most cases, employers aren’t required to submit Form I-9 to any government agency. Instead, the form must be completed, retained, and made available for inspection if requested by federal authorities.
Some employers, however, are required, or may choose, to use the federal E-Verify system. E-Verify electronically compares information from the I-9 against records from the Social Security Administration (SSA) and the Department of Homeland Security (DHS) to confirm an employee’s eligibility to work.
Because E-Verify requirements vary by state and industry, employers should confirm their obligations with legal counsel or compliance experts.
Form I-9 and Employment Verification
For starters, let me debunk the myth that staffing agencies aren’t required to complete Forms I-9s. Even if your workforce is largely made up of contractors, Form I-9 requirements can’t be overlooked. Federal law mandates that every employer verify the identity and work authorization of each employee hired in the United States.
While independent contractors may not require a Form I-9, staffing agencies that place workers on their payroll must complete and maintain these forms accurately. Understanding when the requirement applies (and how long to retain completed records) is critical to avoiding costly penalties and ensuring compliance.
I-9 For Independent Contractors
Independent contractors, paid via 1099, aren’t required to complete a Form I-9.
The U.S. Citizenship and Immigration Services (USCIS) states that Form I-9 is required only for individuals who are hired as employees. True independent contractors, those who are self-employed and offering services to your business, are responsible for verifying their own work authorization.
However, there’s an important compliance detail:
- If a staffing agency places a worker on its payroll, that person is considered an employee of the agency, not an independent contractor, and the agency must complete Form I-9.
- If the agency contracts with a third-party vendor or independent contractor business, the responsibility to verify work eligibility rests with that contractor, not the agency.
The risk comes when workers are misclassified. If someone is treated as a contractor but actually functions as an employee, the employer could face penalties for failing to complete I-9s.
You can read more about Independent Contractors and Temporary and Staffing Agencies in the official USCIS list of Exceptions.
If you’re still unsure whether a worker qualifies as an exception, we can help clarify requirements around I-9 completion, retention periods, and special rules that apply to staffing agencies.
Navigating exceptions for certain worker categories and non-traditional hires can be complex. To reduce risk, always confirm your approach with qualified compliance counsel.
Staffing Agency Hiring – I-9 for Staffing Agencies
With these important details in mind, let’s dive into the top three things every staffing agency needs to know when filing a Form I-9, and the legal ramifications of failing to do so.
When to Complete Form I-9
For staffing agencies, timing is everything when it comes to Form I-9. The key question is: should the form be completed when an employee accepts an offer with your agency, or when they’re assigned to their first job?
Agencies generally have two acceptable options for setting the “first day of employment” on Form I-9:
- The date the employee is assigned to their first job
- The date the employee is entered into the assignment pool
Both approaches are acceptable, but consistency is critical. Whichever option your agency chooses, it must be applied the same way for every employee. This standardization will matter if Immigration and Customs Enforcement (ICE) audits your records.
Key deadlines to remember:
- Section 1: The employee may complete this as soon as— but not before—accepting an offer with your agency. It must be completed no later than the date you record in Section 2.
- Section 2: Must be completed by the agency within three business days of the date entered as the employee’s first day of employment in Section 2.
Form I-9 Records Retention
Every staffing agency is at risk of an I-9 audit by a federal agency such as ICE. This risk escalates quickly if forms aren’t properly completed, stored, or retained. Agencies must maintain reliable record keeping systems that ensure an I-9 is on file for every employee placed on payroll.
How Long Should Employers Retain Form I-9?
Employers must keep each employee’s Form I-9 on file for three years after the date of hire or one year after the employee’s termination, whichever is later.
Examples:
- If an employee works for one year, the I-9 must be kept for two more years (total of three years from hire date).
- If an employee works for ten years, the I-9 must be kept for one year after separation.
Retention requirements apply to all employers, regardless of size, and forms must be readily available in the event of a government audit. For questions about specific cases, consult legal counsel or compliance experts.
Form I-9 Audits
Staffing firms face challenges unique to their industry, including high turnover (especially common in sectors like hospitality, food service, and cleaning). This makes consistent compliance practices even more critical.
As I explained above, employers are required to retain each Form I-9 for three years after the employee’s start date or one year after termination, whichever is later.
To stay prepared, staffing agencies should:
- Conduct regular internal audits to verify I-9 accuracy and storage;
- Address common mistakes (See: What Triggers I-9 Audits);
- Avoid discriminatory practices, such as requesting specific documents (e.g., a green card) before placement, which is prohibited by law; and
- Leverage E-Verify, which adds an extra layer of validation to reduce the risk of onboarding unauthorized workers.
The consequences of noncompliance can be severe, including fines, penalties, and even loss of the ability to operate. With I-9 audits on the rise, proactive auditing and staff training remain the strongest safeguards.
Still have questions? If your staffing agency needs guidance on when to complete an I-9, how long to keep records, or whether you must complete an I-9 for a new placement, our team can help.
Partnering with Mitratech for Form I-9 Compliance
Employers must complete Form I-9s on time, store them correctly, and be ready to produce them if requested by ICE. But onboarding is already a high-pressure process, and manual workflows only increase the risk of errors that could trigger compliance issues.
That’s where Mitratech comes in. We partner with staffing agencies to ensure every Form I-9 is prepared accurately, retained properly, and fully compliant well ahead of any federal audit. With a 20+ year track record of zero client fines in federal audits, Mitratech’s Tracker I-9 is the trusted choice for audit-ready I-9 compliance.
By centralizing hiring and onboarding workflows into a single, automated dashboard, you can reduce manual work, eliminate duplicate data entry, and ensure your I-9 process is both efficient and compliant, without relying on paperwork and people power.
Simplify I-9 compliance with Tracker I-9. See how Mitratech helps staffing agencies streamline onboarding and stay audit-ready.
Staffing Agency Hiring FAQ
Are there new forms every year?
The U.S. Citizenship and Immigration Services (USCIS) only updates the federal Form I-9 when there’s a regulatory change, a policy update, or a need to clarify instructions, not on a fixed annual schedule. Employers need to make sure they’re always using the most current, valid version on the USCIS website and follow the published implementation date for any updates.
I just completed the I-9 with a new hire and realized I put down the wrong date. What do I do?
If you find an error on an I-9, the USCIS recommends that you do the following:
- Draw a line through the incorrect information
- Enter the correct information
- Initial and date the correction
Once you’ve completed the above steps, include a note with the I-9 explaining why the change was made.
Does a contractor need to fill out an I-9?
No. Independent contractors don’t complete Form I-9. The requirement applies only to employees hired onto a company’s payroll.
Do independent contractors need to complete an I-9?
No. True independent contractors, those paid via 1099 and not treated as employees, are responsible for verifying their own work eligibility. Employers should not complete I-9s for them.
Do 1099 contractors need to complete an I-9?
No. Workers classified as 1099 contractors are not subject to Form I-9 requirements. However, misclassification is a risk. If a worker functions like an employee but is labeled a contractor, the employer may face penalties for failing to complete required I-9s.
Is it mandatory to fill out Form I-9?
Yes. All U.S. employers must complete Form I-9 for every W-2 employee, whether full-time or part-time. Independent contractors, however, aren’t required to complete an I-9 since they’re not classified as employees.
What do clients look for when hiring a staffing agency?
Clients expect staffing agencies to:
- Properly classify workers as employees or contractors
- Ensure I-9s are completed for anyone on the agency’s payroll
- Maintain accurate, audit-ready records
- Protect them from compliance risk tied to employment verification
