By Karen Brooks
AUSTIN, Texas (Reuters) - U.S. employers are increasingly being required to use a free, Internet-based system operated by the government to check that a new employee can work legally in the United States.
The system, called E-Verify, has been developed over 15 years and is operated by the Department of Homeland Security in partnership with the Social Security Administration. It has steadily improved but critics say still has a long way to go.
From 88,000 employers enrolled in fiscal year 2008 who checked 6.6 million records, E-Verify participation rose to 216,000 employers in 2010 who checked 13.4 million records.
As of June 22, 271,460 employers were participating with approximately 11 million records checked so far in fiscal 2011, according the Department of Homeland Security website.
Supporters say more than 1,300 U.S. employers a week are being added to the system, with conservatives, Republican lawmakers and a growing number of states seeing it as a solution for the approximately 11 million illegal immigrants now living in the shadows, some 70 percent who work.
But even supporters acknowledge the system continues to make mistakes and, on its own, is not the ultimate answer for states struggling to free up jobs for American workers.
"Mandatory E-Verify as currently designed will not be a panacea for ending unauthorized employment," said Lisa Roney, who was director of Research and Evaluation in the U.S. Citizenship and Immigration Services' Office of Policy and Strategy when the E-Verify program was implemented.
Created as a pilot program in 1996 and designed to replace the current I-9 work authorization system, E-Verify is free, simple and quick. Employers enter into the Web-based system the employee's date of birth and then either a social security number or a passport or visa number.
The system checks the information against government databases. While the employer waits, the system returns either an authorization or a "tentative non-confirmation," or TNC.
If the system returns a TNC, the employee has eight days to contest the report. If the employee in the end remains unauthorized, the employer is required to fire the employee.
The system is only run on new hires, not job applicants.
In a report in December 2010, the Government Accounting Office said that in fiscal year 2009 E-Verify "immediately confirmed" about 97.4 percent (or 8.2 million) newly hired workers as authorized, compared to 92 percent in fiscal 2006.
But government officials have said there's no way yet to determine exactly how many TNC's were actually unauthorized to work - or how many were actually legal workers caught up in a system that can make mistakes.
The biggest problem is that E-Verify is still easily defrauded with borrowed or stolen information, experts say.
Congressman John Conyers, the ranking Democrat on the U.S. House Judiciary Committee, said because of error rates and other issues, he doesn't support making E-Verify mandatory.
"The hypocrisy inherent in this massive government expansion is even more troubling because it doesn't even work," Conyers of Michigan told the committee earlier this year.
RIDDLED WITH ERRORS?
Nevertheless, as the often bitter debate over illegal immigration continues across the country, about 20 states now require businesses to use E-Verify. Some federal and state contractors are also required to use the system.
Georgia, Alabama, Utah, Louisiana and South Carolina are among states that passed laws this year mandating E-Verify.
"Because of the unemployment rates, it is especially timely, it is especially needed, and it will create a lot more jobs for those unemployed Americans," said Texas Republican Congressman Lamar Smith, chairman of the House Judiciary Committee and author of the 1996 law creating the program.
"I think we've reached a point now where it's an absolute necessity," Smith, who wants to make E-Verify mandatory, said.
President Barack Obama in June expressed reservations about requiring employers to use a system he said could be "riddled with errors," but has not said he would veto such legislation.
The best way to solve TNC errors, Roney and others say, is through biometrics, such as fingerprints and photographs, or a National I.D. system, neither of which is politically popular.
"You really do need an E-Verify program, and you need it to be mandatory, and everyone has to use it," said Pia Orrenius, a senior economist and policy advisor at the Federal Reserve Bank of Dallas and co-author of the book "Beside the Golden Door: U.S. Immigration Reform in a New Era of Globalization."
"But it has to be biometric. That's quite controversial, but only with a biometric system can you cut down on a large and rapidly growing market for document fraud."
Roney said that, while it's not common, authorized workers are occasionally denied an E-Verify confirmation for reasons that include employer error or outdated information.
Unscrupulous employers could also break the law by firing workers or otherwise discriminating against them before they have the chance to contest a TNC, Roney said.
"I don't think it's a whole lot. But there are clearly authorized workers who get caught up," Roney said.
Roney added that while E-Verify is imperfect, it's better than nothing and "much more effective" at keeping unauthorized employees out of the workforce than the I-9 alone.
Experts say that while mandatory E-Verify could help the economy by opening up more jobs to native U.S. workers, it could also take workers off the books, encourage employers to turn to private contractors, and force families into poverty.
"This cuts many ways," Orrenius said. "So it's not a clear win-win."
Critics remain vocal. Business groups say E-Verify costs small businesses money since it takes time and resources. Civil-rights advocates say it promotes discrimination in the workplace. And many agricultural employers want broader reform allowing guest workers, saying E-Verify guts their workforce.
In Georgia, two weeks after the governor signed legislation mandating E-Verify in May, farmers found up to 40 percent of their usual harvest crews absent, said Charles Hall, executive director of the Georgia Fruit and Vegetable Association.
"At this point, we're trying to assess what type of harvest losses we had during the harvest season," he said.
(Reporting by Karen Brooks. Editing by Tim Gaynor and Peter Bohan)