Employers are required to confirm the work authorization of every new employee hire, using an I-9 form for this purpose. This is a Department of Homeland Security form. You are not expected to be an expert on the subject and if you are acting in good faith and follow the list provided by the I-9, you should be protected if it appears that the worker presented fake documentation.
After hiring the employee, if any information comes to you suggesting that you hired an undocumented employee, such as the social security administration warning you that someone on your payroll is using a number that does not match the name you should look into it.
Indeed, this kind of information constitutes a “reason to know”, that might hold you responsible in the future for hiring an undocumented employee.
Hiring independent contractors might be a way to avoid this verification process because you don’t have to confirm the work authorization in that case. Nevertheless, you can still be found liable if you had a “reason to know” that this worker was not authorized to work.
Hiring undocumented employees can lead you to face civil and criminal penalties. The range for civil penalties for a 1st offense goes from $250 to $2000 per worker, depending on the state.
If it appears that hiring undocumented workers is a common practice within your company, you might have to pay a fine up to $3000 per worker or face 6 months of prison, again depending on the state.