Federal Immigration and Work Eligibility Laws

Overview of Work-Eligibility Compliance (Federal Level)

Hiring in the U.S.? Then you’re automatically playing by federal rules when it comes to immigration and work eligibility. Here’s the basic lay of the land:

• IRCA (Immigration Reform and Control Act of 1986): Requires all employers to verify that every employee is authorized to work in the U.S. That means no hiring people you know aren’t authorized, and no discrimination based on citizenship or national origin while you’re at it.
• Form I-9: Every employee fills this out on day one, and you finish your section within three business days. It’s the cornerstone of legal hiring, so treat it like a big deal (because it is).
• E-Verify: A federal database that checks your I-9s against government records. Optional for most private employers, but mandatory for federal contractors and in certain states. More on that later.
• Work Authorization: Citizens, green card holders, certain visa holders (like H-1Bs), and folks with Employment Authorization Documents (EADs) are all fair game.

Oh, and don’t get too cozy—states and cities can (and do) pile on extra rules. That’s why we’re breaking this down by location in the rest of this series.

Immigration Reform and Control Act (IRCA) Compliance: Federal Requirements

IRCA doesn’t require anything beyond the I-9, but it does make clear that you can’t knowingly employ unauthorized workers. You’re also responsible for completing and storing I-9s on time, and you can’t play favorites with documents—no asking for “preferred” IDs.

Common Questions Employers Ask About IRCA 

One big question is about rejected I-9 documents. It usually happens when documents are expired, don’t match the name on file, or aren’t on the acceptable list.

Can you accept a digital driver’s license? Not yet—DHS still wants original physical documents.

Remote hires must follow the same rules: the employee does Section 1 by day one, and you’ve got three business days to complete Section 2. You can use an authorized rep to verify their documents.

And no, photocopies won’t cut it. You need to see the original, unexpired docs.

Federal E-Verify Requirements

At the federal level, E-Verify is mandatory only for federal contractors and subcontractors under the FAR. For everyone else, it’s optional unless a state law says otherwise.

You run the E-Verify check after completing the I-9, usually within three business days of the employee’s start date.

What Employers Ask About E-Verify 

Many ask whether to run the check based on the hire date or the start date—the answer is the start date. If the system returns a Tentative Non-Confirmation (TNC), you need to notify the employee and give them the option to contest it. That means providing a Further Action Notice and waiting for them to take steps.

Remote workers follow the same timelines, and you can have a rep check their docs in person.

Skipping E-Verify when you’re required to use it can lead to serious consequences—contract termination, fines, and even being barred from future contracts. Most penalties are civil, but repeat violations could go criminal.

Visa & Employment Authorization Rules (Federal Level)

Under federal law, employees are work authorized if they’re a U.S. citizen, a lawful permanent resident, have a valid EAD, or hold a visa that permits employment—like H-1B, L-1, O-1, or TN.

Visa Sponsorship and EAD Questions 

Yes, you can file H-1B transfers for employees in another state—but you may need to amend the Labor Condition Application (LCA) if the job location changes.

When an employee’s EAD renews, you do need to update their payroll and tax records. And if you’re laying off an H-1B worker before their visa ends, you’re required to notify USCIS and offer to pay for return travel.

Penalties for Non-Compliance (Federal Level)

Get your I-9s wrong and you could be fined anywhere from a few hundred to several thousand bucks per violation. Knowingly hiring unauthorized workers? That could cost you over $20K and potentially land you in court.

Record-Keeping & Retention Guidelines

I-9 forms need to be stored for three years after the hire date or one year after the employee leaves—whichever is later. A centralized digital system with automated purge alerts can save you from a compliance nightmare.

Anti-Discrimination & Retaliation Protections

Federal law (INA § 274B) makes it illegal to discriminate based on citizenship status or national origin. You can’t ask for specific documents or reject valid ones just because you’re “more comfortable” with others. And retaliating against workers who raise concerns? That’s illegal too.

Employer Best Practices for Federal Work Eligibility Compliance

Appoint someone to oversee compliance. Do yearly internal audits. Train hiring teams on how to handle I-9s without bias. Lock down sensitive documents, and use a system to track expiring work authorization so nothing slips through the cracks.

How WorkforceHub Simplifies Immigration Compliance

WorkforceHub walks you through I-9s with real-time error checks. It connects to E-Verify for instant submissions and tracks case statuses. You’ll also get alerts when re-verifications are due, plus a secure cloud vault for storing docs and building audit reports.

Want a smoother, smarter way to stay compliant? [See a demo of WorkforceHub in action — and take the stress out of immigration compliance.]