I always had fill out an I9 when I applied for work. I've never been allowed to take a job where my citizenship wasn't at least notionally vetted.
There's plenty of employers who don't bother with checking their employees' status. If you're a contractor, for example, you hire a bunch of illegals and pay them in cash. You then list them as "sub-contractors," rather than as "employees" when doing your paperwork. You don't have to check the immigration status of a sub-contractor.
Other companies just don't bother checking their employees' immigration background. They don't need to- there is a very small chance that they will get caught by the INS. Big corporations exert pressure on Senators and Congressmen (of both parties), who exert pressure on the INS to not do many raids on those corporations.