By Karen Brooks
AUSTIN, Texas (Reuters) - Another front is opening in the divisive U.S. battle on illegal immigration over whether employers should be required to use a controversial Internet-based system to verify worker eligibility.
Introduced 15 years ago, E-Verify is operated by the Department of Homeland Security in partnership with the Social Security Administration. Employers enter new hires' dates of birth, Social Security or passport numbers, and the system checks government databases to confirm whether they can legally work in the United States.
A bill introduced in June in Congress would force all U.S. employers to use the system, and supporters say this would help ensure that jobs are reserved for citizens and legal workers.
But opponents do not want its use to be obligatory, citing numerous faults with the system. They say it makes errors, gives rise to racial discrimination, hurts farm employers and raises privacy concerns.
The issue of immigration reform is expected to grab renewed attention in the 2012 election in which President Barack Obama and his Republican challengers will seek the pivotal Hispanic vote. An estimated 11 million illegal immigrants, some 70 percent of whom work, now live in the shadows.
"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 for the immigration service when the E-Verify program was implemented.
Participation in E-Verify is currently voluntary for most companies, but there are exceptions. About 20 states now require businesses to use E-Verify. The program is mandatory for most employers in Arizona and Mississippi under state law, and U.S. regulations require firms with federal contracts or subcontracts to use the system.
The U.S. Supreme Court recently endorsed an Arizona law requiring employers to use 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 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," said Smith, who wants to make E-Verify mandatory.
POSSIBLE FRAUD, ERRORS
Immigrant rights groups and unions are among E-Verify's most vocal critics, and government officials acknowledge that the system has room for improvement. An undocumented individual who steals the identity of a U.S. citizen would not be flagged by the network, for example.
Representative 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.
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 prevent the system from mistakenly declaring a worker ineligible, Roney and others say, is through biometrics, such as fingerprints and photographs, or a national ID 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 adviser 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.
As of June, 271,460 employers were participating with about 11 million records checked so far in fiscal 2011, according the Department of Homeland Security website. That's up from 88,000 employers in fiscal 2008.
The system was designed to replace the I-9 form work authorization system, but currently both are in use.
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.
(Editing by Tim Gaynor, Peter Bohan, Cynthia Osterman and Eric Walsh)