ATLANTA -- A three-year-old Georgia law requiring companies with state or local government contracts to ensure their employees can legally work in the U.S. has gone largely unenforced, as lawmakers haven't been able to come up with an effective way to enforce it.

Meanwhile, the Obama administration said this week it will require businesses that get federal contracts to run similar checks using the federal E-Verify system - the same system used under the 2006 Georgia Immigration and Compliance Act.

The Georgia law was phased in over three years and the final phase, requiring compliance for contractors and subcontractors with fewer than 100 employees, took effect July 1. An attempt this year by state lawmakers to boost compliance essentially failed because a provision to withhold road building funds from cities and counties that didn't comply was removed.

"It doesn't go as far as we wanted it to," said Rep. Tom Rice, R-Norcross, the bill's sponsor, adding that he plans to try again next year. The law still has no real consequence for noncompliance.

When the Legislature passed the sweeping immigration law, which also requires that new applicants for public benefits be screened, critics and supporters alike considered it one of the toughest in the country.

Supporters said it would keep taxpayer dollars from going to illegal immigrants. Critics complained the databases are flawed and can lead to legal workers or benefit applicants being flagged as ineligible.

About 1,000 employers sign up for E-Verify each week, according to the U.S. Homeland Security Department, which says it works constantly to eliminate errors in the database.

An Associated Press review in January of Department of Homeland Security numbers from August 2008, the most recent available at the time, showed that 97 of 159 Georgia's county governments, or 61 percent, hadn't even signed up to use E-Verify. They should all have been in compliance by July 1, 2007. The total number of Georgia businesses and government agencies with access to E-Verify was about 2,200.

Despite the lack of enforcement in Georgia, a review this week of Homeland Security numbers from May 1 shows that the number of businesses or government agencies in the state with access to E-Verify has risen markedly since last year. Only eight county governments, or 5 percent, have not yet signed up. Nearly 7,100 entities have access in Georgia.

However, free access and quick registration does not guarantee the database will be used. Some local governments and agencies have said they weren't using it because they don't have money to train staff or the time to run the checks.

"It's just an example of why states shouldn't be messing around with immigration law," said Charles Kuck, an Atlanta immigration lawyer and past president of the American Immigration Lawyers Association.

"It still has no teeth. It's just a rhetoric-building, resume-building, toothless piece of legislation."

On its Web site, the state Labor Department sets forth rules governing the employment eligibility checks, including a random audit program. But that provision won't go into effect "until necessary funds have been specifically appropriated by the General Assembly," the site says.

The compliance rate for another part of the 2006 law requiring screening of applicants for public benefits - like Medicaid, food stamps and professional licenses - is even lower. In January, only 13 state governments or agencies had signed up to access the Systematic Alien Verification for Entitlements database. Homeland Security numbers from this week show just 17 users. Obstacles to registration for that program include a more involved registration process and a fee of at least 50 cents for each check.

Homeland Security Secretary Janet Napolitano said Wednesday that contractors and subcontractors with federal contracts will be required to run the work authorization checks starting Sept. 8. The U.S. Senate on Thursday voted for a proposal to make the E-Verify system permanent.

However, there will be enforcement at the federal level, said Homeland Security spokesman Matt Chandler. Staff will be added to the E-Verify monitoring and compliance unit of the U.S. Citizenship and Immigration Services division of the department to ensure that the system is being used properly, and violators will face penalties, including possibly losing their contracts or paying a fine, he said.