How to hire workers legally (and avoid I-9 risk)

Hiring someone who isn’t authorized to work is one of the costliest mistakes a business can make. Here’s what the law actually requires, and the simplest way to stay on the right side of it.

Four steps to hire workers legally

1. Complete Form I-9 for every new hireWithin three business days of someone’s start date, complete Form I-9 to verify their identity and authorization to work, using documents from the federal list.
2. Check whether you must use E-VerifyTennessee requires private employers with 35 or more full-time-equivalent employees to use E-Verify. Smaller employers must use it or keep authorized work-eligibility documents on file.
3. Keep your recordsRetain each worker’s Form I-9 and supporting documents for as long as the law requires, in case of an audit.
4. Or hire through a W-2 staffing agencyWhen the workers are the agency’s employees, the agency completes their verification and carries the responsibility. You get authorized workers without the paperwork.

Is it illegal to hire undocumented workers?

Yes. Under federal law it is illegal to knowingly hire someone who isn’t authorized to work in the United States. Every employer is required to verify each worker’s identity and work authorization, and getting it wrong can mean steep fines and, in serious cases, criminal liability.

What Form I-9 requires

Form I-9 is the federal form every US employer completes for each employee. Within three business days of someone’s start date, you confirm their identity and authorization to work by reviewing documents from the official federal list. Those records have to be kept on file.

Tennessee’s E-Verify law

The Tennessee Lawful Employment Act goes a step further. Private employers with 35 or more full-time-equivalent employees are required to use E-Verify, the federal online system that confirms work authorization. Employers with fewer than 35 must either use E-Verify or request and keep specific identity and work-eligibility documents on file.

How a staffing agency keeps you compliant

Here’s the simplest path: when you hire through a W-2 staffing agency, the workers are the agency’s employees, not yours. As the employer of record, Labor Exchange completes Form I-9 and verifies the work authorization of every worker before we dispatch them. The paperwork, and the liability, stay with us. You can read more about how that employment relationship works in our guide to who covers W-2, taxes, and workers’ comp for temp workers.

Common questions