Case Studies Lessons from Recent I9 Enforcement Actions

Recent enforcement actions illustrate what went wrong, what could have been prevented, and what employers should take away as scrutiny continues in 2026.

The following cases show how these risks materialize in practice—across industries, company sizes, and enforcement scenarios.

Case 1: ICE Denver Field Office — $8+ Million Form I-9 Enforcement Action (2025)

In one of the most significant Form I-9 enforcement actions reported in 2025, U.S. Immigration and Customs Enforcement (ICE) proposed over $8 million in civil penalties against three janitorial companies for employing at least 143 unauthorized workers. ICE described the findings as “widespread employment eligibility violations,” pointing to systemic compliance failures rather than isolated paperwork errors.

According to ICE, CCS Denver, Inc. was fined $6.2 million for employing at least 87 unauthorized workers, PSC Commercial Cleaning Services, Inc. faced $1.6 million in proposed penalties, and Green Management Denver was fined $270,195. The scale of these penalties places the case among the largest workplace enforcement actions announced this year and signals heightened scrutiny in high-turnover industries.

Importantly, these penalties did not result from a workplace raid. ICE confirmed the action stemmed from Form I-9 audits, one of the agency’s most common enforcement tools. In an I-9 audit, employers are subpoenaed to produce I-9 forms and supporting documentation for every employee, allowing regulators to assess record accuracy, completion practices, and retention compliance. For many organizations, audits expose weaknesses long before any onsite enforcement occurs.

Employers have been required to verify employment authorization using Form I-9 since the Immigration Reform and Control Act (IRCA) of 1986, and I-9 audits have remained a consistent enforcement mechanism across administrations. This case underscores how long-standing requirements, when neglected, can translate into substantial financial exposure.

What went wrong

• Decentralized I-9 storage across locations
• Inconsistent completion practices among hiring managers
• No centralized audit trail to demonstrate good-faith compliance

What could have prevented it

A centralized I-9 compliance system with standardized workflows, automated validation checks, and documented internal audits would have identified errors early—reducing both regulatory risk and potential penalties well before inspection.

Case 2: Walmart — Proposed $24 Million I-9 Penalty and Recordkeeping Failures (2018–2021, litigated in 2025)

In a high-profile enforcement action that resurfaced in 2025, national retail giant Walmart faced the federal government’s renewed effort to impose a proposed $24 million civil penalty tied to widespread Form I-9 recordkeeping violations. Between 2018 and 2021, U.S. Immigration and Customs Enforcement (ICE) conducted audits of at least 20 Walmart facilities nationwide, including locations in Georgia, and identified more than 11,000 technical I-9 violations involving documentation accuracy and record retention, according to federal court records.

Although Walmart ultimately did not pay the proposed fine, the case gained renewed significance after a federal appeals court ruled that Walmart must face the government’s enforcement action, reversing an earlier Georgia judge’s decision in the company’s favor and allowing the case to proceed. The ruling reinforced ICE’s authority to pursue substantial civil penalties for large-scale I-9 recordkeeping failures, even in the absence of allegations involving unauthorized workers.

The case underscores a critical reality for employers: I-9 enforcement does not require workplace raids or findings of unauthorized employment. ICE primarily relies on administrative audits, issuing subpoenas that require employers to produce Forms I-9 and supporting documentation within strict deadlines. When inspections uncover technical or procedural violations—such as missing fields, outdated forms, or improper retention—civil penalties may be assessed per form, allowing exposure to escalate rapidly across large or decentralized workforces.

Employers have been required to complete and retain Form I-9 for every new hire since the Immigration Reform and Control Act of 1986 (IRCA), and this case highlights how recordkeeping gaps alone can drive multi-million-dollar enforcement risk—even for organizations with mature HR infrastructures.

What went wrong:

• Technical and procedural I-9 completion errors across multiple locations

• Lack of standardized workflows and consistent form version controls

• Inadequate centralized storage and rapid retrieval of I-9 records

What could have prevented it

A centralized, audit-ready I-9 compliance platform with standardized workflows, automated validation checks, consistent form versioning, and real-time audit trails would have reduced systemic errors and strengthened the employer’s ability to demonstrate good-faith compliance during inspections.

Case 3: United States v. Pasquel Hermanos, Inc. — OCAHO Penalty for Missing I-9s (2025)

In United States v. Pasquel Hermanos, Inc., an ICE inspection and subsequent OCAHO proceeding resulted in a final order against a small Texas bakery and food distributor for failing to produce any Forms I-9 for most of its workforce during a government inspection. The Department of Homeland Security alleged that the employer did not prepare or present the required I-9 forms for 22 of its 23 employees after receiving a Notice of Inspection and subpoena to produce employment eligibility records. After review by an administrative law judge at the Office of the Chief Administrative Hearing Officer (OCAHO), Pasquel Hermanos was ordered to pay $31,900 in civil penalties ($1,450 per violation) for failing to prepare and present the necessary I-9 forms — underscoring that even small businesses can face significant enforcement outcomes when basic verification obligations are not met.

What went wrong:

• Failure to prepare or present I-9s for virtually the entire workforce during inspection

• Lack of centralized or accessible records

• No documented compliance process to produce I-9s within the required three business days after receiving an inspection notice

What could have prevented it

A modern, centralized I-9 compliance platform that automatically tracks completeness, deadlines, and storage compliance would have ensured all records were readily available for inspection, greatly reducing enforcement exposure.

Clear I-9 by HRlogics: Turning Lessons into Prevention

Instead of reacting to enforcement, organizations can build proactive, defensible compliance programs.

Clear I-9 by HRlogics helps employers avoid fines similar to the ones in these cases through:

• Automated I-9 validations and error detection
• Centralized, audit-ready recordkeeping with full audit trails
• E-Verify integration and work authorization tracking
• Automated alerts for reverifications, expirations, and follow-ups
• Remote verification tools and live video verification options
• Secure, SOC-certified data storage with strict access controls

Final Takeaway: Enforcement Is Predictable — Outcomes Don’t Have to Be

These enforcement actions share a common thread: errors were preventable. Missing forms, inconsistent practices, and poor visibility create unnecessary risk—especially as inspections and penalties continue to rise.

Organizations that treat I-9 compliance as an ongoing operational discipline—not a one-time task—are far better positioned to withstand audits, inspections, and regulatory scrutiny.

Ready to reduce I-9 exposure before an inspection arrives?
Schedule a Clear I-9 demo and discover how automation, visibility, and audit-ready workflows help protect your organization.