While the issue does need to be addressed on the national level, "I think this is more complex than we're painting it here," said Sen. Pat Jones, D-Holladay, adding some businesses are trying to sort out who's legal and who isn't. "Many say their companies would fold if these people were excluded from our population. Whether (the report shows the undocumented are) a benefit or detriment to society is in the eye of the beholder."

That's exactly the issue that members of the Business and Labor Committee grappled with as they discussed issues of labor shortages, along with verifying workers' legal status and paying workers under the table. A working group heard from industry representatives who are facing worker shortages and from those who work against identity theft.

"The states are going to have to take that obligation on because the federal government is unwilling to do it," Sen. Bill Hickman, R-St. George, said.

Jim Olsen, president of the Utah Retail Merchants Association, said the state's low unemployment has created a "desperate need" for workers.

"In the retail industry we are reliant on immigrants. As far as we know, they are legal," he said.

Currently, employers are required to ensure a new hire has documentation, as required by federal law, and to keep an I-9 verification form on file. However, verifying that information using the Internet-based federal Basic Pilot program is optional. There are 152 employers in Utah that participate in the federal Basic Pilot program, representing 457 hiring sites, according to U.S. Citizenship and Immigration Services.

Olsen said Basic Pilot isn't perfect because it only verifies whether a name matches a Social Security number, not whether it's the person named on the card. He pointed to Swift & Co., which participates in the program but still had 1,282 suspected illegal immigrants arrested last December at its plants in Utah and other states.

But Assistant Attorney General Richard Hamp called the Swift situation an "anomaly," saying requiring a federal verification could solve most of such problems.

"Ninety percent of the identity theft I see is fairly unsophisticated," Hamp said. "The name does not match the Social Security number and would be picked up."

Attorney General Mark Shurtleff said a possible solution would be to penalize employers with license action if they repeatedly hire people whose names and Social Security numbers don't match.