California Employment Verification Laws: I-9, E-Verify, and Penalties

California employment verification laws require every employer to complete federal Form I-9 for each new hire within three business days, while state statutes add sharp limits on E-Verify use, prohibit a range of document-abuse and retaliation practices, and control how you respond when immigration agents appear at your workplace. Break the state rules and you face civil penalties of up to $10,000 per violation on top of any federal fine. The rules tightened again in 2026, when ICE reclassified several I-9 errors that used to be correctable into immediately finable offenses.

The Federal Baseline: Form I-9

Every employer in the United States completes Form I-9 for each person hired, regardless of citizenship.¹ The employee fills out Section 1 on or before the first day of work. You examine the employee’s identity and work-authorization documents and finish Section 2 within three business days of the hire date.² Miss the three-day window and it counts as a violation even if you eventually complete the form.

Employees pick which documents to show. You cannot demand specific ones. The lists work like this:

List A documents prove both identity and work authorization together. Common examples: a U.S. passport or passport card, a Permanent Resident Card (Form I-551), an Employment Authorization Document with photo (Form I-766), or a foreign passport with the appropriate visa or I-94 notation.
List B documents prove identity only. A state driver’s license or ID with photo, a voter registration card, a U.S. military card, or a Native American tribal document all qualify.
List C documents prove work authorization only. An unrestricted Social Security card, a U.S. birth certificate with an official seal, or certain Department of State birth-abroad certifications are typical.

An employee who presents one List A document is done. An employee who presents a List B document must also present a List C document. Asking for more than that, or rejecting a document that appears genuine on its face, violates both federal and California law.³

Keep completed I-9s on file for three years after the date of hire or one year after the employee leaves, whichever is later, and produce them if DHS, DOL, or DOJ officials request them.¹

When You Can and Cannot Use E-Verify in California

E-Verify is the federal electronic check that runs new-hire information against government databases. California Labor Code Section 2814 sharply restricts when employers may use it. You cannot run E-Verify on a current employee. You cannot run it on an applicant who has not yet received a job offer. Each unauthorized query is a separate violation carrying a civil penalty of up to $10,000.⁴

Two narrow exceptions apply: when federal law requires E-Verify, or when enrollment is a condition of receiving federal funds. In practice, this mostly touches federal contractors whose contracts include FAR clause 52.222-54. That clause applies when a contract exceeds $150,000, runs 120 days or longer, involves work performed in the United States, and is not exclusively for commercial off-the-shelf items. Subcontractors performing services or construction may be covered when the subcontract exceeds $3,500.

If you do use E-Verify and receive a tentative nonconfirmation, meaning the employee’s information didn’t match federal records, you must follow the notification procedures in the E-Verify memorandum of understanding and promptly share the notice with the employee.⁴ Failing to pass along that notice is itself a violation.

Document Abuse and Unfair Immigration-Related Practices

California devotes an entire chapter of the Labor Code to unfair immigration-related practices, and the rules reach further than I-9 mechanics. Labor Code Section 1019.1 makes it unlawful, while completing the federal verification process, to request more or different documents than federal law requires, to refuse documents that appear genuine, or to reject work authorization based on the specific immigration status shown. This is the provision that most often catches well-meaning employers. If a new hire hands you a valid Employment Authorization Document, you cannot insist on seeing a green card instead because it “looks more permanent.” The penalty runs up to $10,000 per violation, recoverable by either the employee or the Labor Commissioner.⁵

Section 1019 adds a retaliation layer. An employer who uses immigration-related threats or actions to punish someone for exercising workplace rights can have all of its business licenses suspended by court order: up to 14 days on the first violation, up to 30 days on the second, up to 90 days on the third or subsequent violation. A prevailing employee also recovers attorney’s fees and costs.⁶

Section 1019.2 separately prohibits unauthorized re-investigation or reverification of an employee’s work authorization done in a retaliatory or discriminatory way, again carrying up to $10,000 per violation.⁷

When Reverification Is Required, and When It’s Illegal

If an employee’s work authorization has an expiration date, you must reverify before that date arrives. You cannot continue employing someone whose authorization has lapsed.⁸ The employee presents a document from List A or List C showing current authorization. Restricted Social Security cards are not acceptable for reverification. Document the reverification on Supplement B of Form I-9 and attach it to the original.

Reverification does not apply to employees whose authorization does not expire: U.S. citizens, lawful permanent residents, asylees, and refugees.⁸ Reverifying a permanent resident’s authorization is a common mistake and, in California, can itself constitute an unfair immigration-related practice.

When Immigration Agents Show Up: The Immigrant Worker Protection Act

California’s Immigrant Worker Protection Act (originally AB 450) controls what happens when federal immigration agents appear at the workplace or ask for employee records. It sets two prohibitions and one notice duty.

You cannot give voluntary consent for immigration agents to enter nonpublic areas of the workplace. If the agent has no judicial warrant, you must refuse access. You cannot voluntarily hand over employee records unless the agent presents a subpoena, a judicial warrant, or a Notice of Inspection specifically requesting I-9 forms under federal law.⁹ Penalties for either violation run $2,000 to $5,000 for a first offense and $5,000 to $10,000 for each subsequent offense.¹⁰

Labor Code Section 90.2 adds two 72-hour clocks. When you receive a Notice of Inspection from an immigration agency, you must post a notice to all current employees within 72 hours. The posted notice must identify the agency, the date you received the notice, the nature of the inspection, and include a copy of the Notice of Inspection itself.¹¹ Written notice also goes to any employee representative, such as a union.

The second 72-hour clock starts when you receive the inspection results. You must give each affected employee a copy of the results and a written explanation of any deficiencies, along with the employer’s and employee’s obligations going forward. Deliver it by hand if possible, or by mail and email if not.¹¹ Missing either notice draws the same $2,000–$5,000 first-offense and $5,000–$10,000 subsequent-offense penalties.

The audit itself starts with the Notice of Inspection. Federal regulations give employers at least three business days to produce the requested forms.¹² That window is tight, which is why keeping I-9s centralized and organized matters long before an audit lands.

Remote Hires and Independent Contractors

Federal regulations normally require an employer or authorized representative to examine I-9 documents in person.² DHS has approved an alternative live-video procedure, but only employers enrolled in E-Verify may use it. Because California law restricts E-Verify enrollment to federal-contract and federal-funding situations, most California employers cannot use remote verification. If you hire a remote worker and are not enrolled in E-Verify, designate an authorized representative near the employee to conduct the in-person document review inside the three-business-day window.

Form I-9 applies only to employees. You do not complete an I-9 for a genuine independent contractor. The distinction turns on control: contractors set their own methods, supply their own tools, offer services to the public, and bear the risk of profit or loss. Federal law still prohibits contracting with someone you know is not authorized to work in the United States.¹³ And California is aggressive about misclassification under AB 5 and the ABC test. If your “contractor” is actually an employee under state law, you owe an I-9, and the misclassification creates separate liability of its own.

Penalties, Federal and State, Stack

Federal I-9 paperwork violations (incomplete or missing forms) draw a statutory penalty of $100 to $1,000 per form under 8 U.S.C. § 1324a, but annual inflation adjustments push the actual figures higher each year.¹⁴ For 2026, the adjusted range runs roughly $288 to $2,861 per form. Where you land within it depends on the size of the business, good faith, seriousness of the violation, and any history of prior violations.

Knowingly hiring or continuing to employ an unauthorized worker draws steeper fines. For 2026, first offenses run roughly $716 to $5,724 per violation, second offenses $5,724 to $14,308, and third or subsequent offenses $8,586 to $28,619. Document fraud violations carry their own tier, starting around $590 for a first offense and topping $11,000 for repeat offenses.

California penalties sit on top:

E-Verify misuse: up to $10,000 per unauthorized query under Labor Code Section 2814.⁴
Document abuse under Section 1019.1: up to $10,000 per violation.⁵
Unauthorized reverification under Section 1019.2: up to $10,000 per violation.⁷
Retaliation using immigration threats: business-license suspension of 14 to 90 days depending on prior violations, plus attorney’s fees and costs.⁶
Immigrant Worker Protection Act violations: $2,000 to $5,000 for a first offense, $5,000 to $10,000 for subsequent offenses, covering voluntary access to nonpublic areas, unauthorized record disclosure, and missed employee notices.¹⁰

Beyond fines, workers subjected to unfair practices can bring civil lawsuits for equitable relief, damages, and attorney’s fees.

What Changed for 2026

The most consequential 2026 change is ICE’s reclassification of several I-9 errors from technical to substantive. Technical errors historically qualified for a correction period of at least 10 business days before a fine could attach. Several no longer do. Errors that lost the grace period include a missing employee legal name or date of birth in Section 1, an omitted employment start date in Section 2, missing dates or signatures in the certification portion, incomplete preparer or translator information in Supplement A, and use of the Spanish-language form outside Puerto Rico. Employers who have not run an internal I-9 audit recently should schedule one now, because mistakes that used to be fixable now trigger immediate financial exposure.

California also added a standing notice duty. The Workplace Know Your Rights Act (Labor Code Sections 1550–1559) requires employers to give all workers, regardless of immigration status, a written notice of workplace rights delivered by the workplace’s normal communication methods (email, text, or in person) in the languages commonly used there.¹⁵ The notice must cover protections against retaliation, protections against unfair immigration-related practices, and the right to organize.

1
U.S. Citizenship and Immigration Services. Employment Eligibility Verification
2
eCFR. 8 CFR 274a.2 – Verification of Identity and Employment Authorization
3
U.S. Citizenship and Immigration Services. Form I-9 Acceptable Documents
4
California Legislative Information. California Code LAB 2814
5
California Legislative Information. California Code LAB 1019.1
6
California Legislative Information. California Code Labor Code 1019 – Unfair Immigration-Related Practices
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California Legislative Information. California Code LAB 1019.2
8
U.S. Citizenship and Immigration Services. 6.1 Reverifying Employment Authorization for Current Employees
9
California Attorney General. Immigrant Worker Protection Act (Assembly Bill 450) Frequently Asked Questions
10
California Legislative Information. AB 450 Employment Regulation
11
California Legislative Information. California Code LAB 90.2
12
U.S. Immigration and Customs Enforcement. Form I-9 Inspection Under Immigration and Nationality Act 274A
13
U.S. Citizenship and Immigration Services. Exceptions
14
Office of the Law Revision Counsel. 8 USC 1324a
15
California Department of Industrial Relations. New California Law Requires Annual Workplace Rights Notice