"Do we need an I-9 for our contractors?" is one of the most common questions HR teams ask, and the short answer is no. Form I-9 is completed for employees. A business is not required to complete one for a genuine independent contractor or for the contractor's own workers.
The longer answer is where the risk lives. Whether someone is really an independent contractor depends on the facts of the working relationship, not on what the contract says or how the person is paid. And the rules contain a safeguard that keeps employers from using contract arrangements to sidestep work authorization requirements. Here is how to think about where the line is.
Who the I-9 rules cover
Every employer in the United States must complete a Form I-9 for each person it hires to perform labor or services in exchange for wages or other pay, as long as that person was hired after November 6, 1986. That includes full-time, part-time, temporary and seasonal employees, and it applies no matter the employee's citizenship.
The regulations carve out a few situations where no Form I-9 is needed. The two that come up most often for businesses are:
- Independent contractors. The regulations specifically exclude independent contractors from the definition of an employee for I-9 purposes.
- Workers provided by a contractor or staffing firm. When you use a company that supplies workers, such as a staffing agency or a contract cleaning service, the company that employs those workers is responsible for their Forms I-9, not you.
There are other narrow exceptions too, such as people who provide domestic work in a private home on a sporadic, irregular or intermittent basis. But for most employers, the contractor question is the one that matters.
How the regulations describe an independent contractor
The I-9 regulations define independent contractors as people or entities who carry on independent business, contract to do a piece of work according to their own means and methods, and are subject to control only as to results. They then list factors to consider in deciding whether someone fits that description, including whether the individual or entity:
- Supplies their own tools or materials.
- Makes their services available to the general public.
- Works for a number of clients at the same time.
- Has an opportunity for profit or loss as a result of the work.
- Invests in their own facilities for the work.
- Directs the order or sequence in which the work is done.
- Determines the hours during which the work is done.
No single factor decides the question. The point is to look at the whole relationship. A freelance web developer who sets their own schedule, uses their own equipment, serves many clients and bills a project fee looks like an independent contractor. A person who works a set shift at your location, uses your equipment, follows your supervisors' instructions and works only for you looks like an employee, even if they signed a contractor agreement and receive a Form 1099.
It is also worth knowing that different government agencies use different tests for worker status. The test the IRS uses for tax purposes and the one the Department of Labor uses for wage and hour purposes are not identical to the I-9 definition. A worker can be treated one way under one set of rules and still raise questions under another, so it is wise to review classification with counsel rather than assuming one answer covers everything.
Why misclassification is an I-9 problem
When a worker is labeled a contractor but is actually an employee, the employer has usually skipped the Form I-9 entirely. That means there is no completed form to show during an inspection. Failing to complete a Form I-9 for an employee is a paperwork violation in its own right, and if E-Verify is part of your process, those workers were never run through it either.
The problem tends to surface at inconvenient times: during a Notice of Inspection, when a contractor asks to be converted to a W-2 role, or when a separate tax or wage audit concludes that a group of "contractors" were employees all along. At that point, the employer has to deal with the missing forms after the fact, which is a much harder conversation than getting it right at the start.
If you reclassify a worker as an employee, treat the change as a hire for I-9 purposes and complete a Form I-9 for them going forward. Do not backdate the form. Complete it with the actual dates and keep a short note in the file explaining when and why the worker's status changed.
The rule against using contracts to avoid the law
There is an important limit on the contractor exception. Under the regulations, a business that uses a contract, subcontract or exchange to obtain the labor of a person while knowing that the person is not authorized to work in the United States is treated as having hired that person in violation of the law.
In practice, that means you cannot turn a blind eye to what a contractor tells you, or what you can plainly see, about its workers' authorization. Knowledge can include information a reasonable person would have recognized. You are not required to verify a contractor's workers yourself, but you should not ignore clear warning signs either.
Sensible steps when you rely on contractors and staffing firms include:
- Using written agreements that make the contractor responsible for its own employees' Forms I-9 and, where applicable, E-Verify.
- Working with established, reputable firms and asking how they handle I-9 compliance.
- Escalating any credible information that a contractor's workers are not authorized, instead of letting it sit.
A quick checklist for HR
Before onboarding anyone outside a normal hire, it helps to ask:
- Is this person truly running an independent business, or will we control when, where and how they work?
- Are they coming through a staffing agency or contractor that employs them and handles their Form I-9?
- Has anyone reviewed the classification, ideally with counsel, using the factors above?
- If the role changes or the person is converted to an employee, who makes sure a Form I-9 is completed on time?
Write your answers down. A consistent, documented process is far easier to defend than a series of one-off decisions.
Keep the line clear
Independent contractors do not need a Form I-9, but the label alone does not settle the question. Look at how the work is actually done, rely on reputable contractors, and complete a Form I-9 promptly whenever a worker is, or becomes, your employee. Clear I-9 by TRAK helps employers keep every employee's Form I-9 complete and on schedule, including workers converted from contractor to employee status.
Not sure your I-9 process covers every worker it should? Request a demo of Clear I-9 and we'll show you how to keep your records complete.
This article is for general information only and is not legal advice. For guidance on your specific situation, consult qualified employment counsel and the official USCIS resources.