Despite complaints about its accuracy and a legal challenge, employers are signing up for the government-run E-Verify program at the rate of almost 1,000 a week.

Testifying last week before the Senate Judiciary Committee, Homeland Security Secretary Janet Napolitano credited the states for the growth of E-Verify saying, “The growth is continuing at a solid clip, due in large part to state laws requiring the use of E-Verify. Currently, an average of 1,000 employers are signing up for E-Verify each week.”

Run by the U.S. Department of Homeland Security, E-Verify allows employers to verify work eligibility by checking information from an employee’s I-9 against the government’s database. Name, date of birth, and social security number are matched against government records. The program is voluntary at the federal level, though some states –  Arizona, Colorado, Georgia, Idaho, Minnesota, Mississippi, Missouri, North Carolina, Oklahoma, Rhode Island South Carolina, and Utah — require participation by in-state employers.

Napolitano said that last year, 14 percent of all new hires were verified through the electronic system.

That number could grow dramatically if a June 30th deadline holds for federal contractors to sign up with E-Verify. The deadline has changed three times since President George Bush first issued an executive order last June. The order made E-Verify mandatory for federal contractors with projects exceeding $100,000 and for sub-contractors with projects exceeding $3,000.

It was to take effect  January 15, 2009. But after being sued by the U.S. Chamber of Commerce, SHRM and other groups, the government agreed to postpone implementation until, first, Feb. 20th, then May 2st, and now to June 30th.

The Obama Administration has signaled its support for the overall E-Verify program, recommending a $12 million increase in the program’s $100 million budget for next fiscal year. In written testimony to the Senate Appropriations Committee Subcommittee on Homeland Security, Napolitano said the funds would be used to improve the performance of the system.

That’s one of the key objections by businesses to using E-Verify. The Chamber of Commerce, in its lawsuit, claims among other things that false results could lead to discrimination complaints against employers. Napolitano, in her Judiciary Committee testimony, said 96.1 percent of the employees run through the system are found to be eligible to work in the U.S. However, 3.9 percent of the cases required further investigation, which is up to the employer to do.

Detractors insist, however, that 4 percent of all queries result in errors due to typographical mistakes, mismatched names, and missing information in the government system.

Two Congressmen last month introduced a bill to replace E-Verify with a mandatory system based on a system used by states to enforce child support payments. A similar bill last year failed to make it through.