Requires such system to: (1) provide verification or tentative non-verification of an individual's identity and employment eligibility within three days of an inquiry; and (2) provide, in the case of tentative non-verification, a secondary process for final verification or non-verification within 10 days.

Provides that: (1) the Commissioner of Social Security shall develop a process for comparing names and social security numbers against appropriate databases in response to employer inquiries; and (2) the Secretary shall develop a process for comparing names and alien identification or authorization numbers and shall investigate uses of the same social security number that suggest fraud.

Limits verification system-related individual relief to procedures under the Federal Tort Claims Act. Prohibits class actions. Immunizes from civil or criminal liability a person or entity who takes action in good faith reliance on verification system information.

Sets forth employer verification requirements with respect to an affirmative defense to liability for employment of unauthorized workers, including revision of attestation and retention of verification form provisions.

Places limits on the collection and use of data from the verification system.

Expands the employment eligibility verification system to include: (1) previously hired individuals; and (2) recruitment and referral.

Provides for: (1) voluntary employer verification utilizing such system two years after enactment of this Act for previously hired individuals; (2) mandatory employer verification three years after enactment of this Act by federal, state, and local governments, and the military for employees not verified under such system working at federal, state or local government buildings, military bases, nuclear energy sites, weapons sites, airports, or critical infrastructure sites; and (3) mandatory employer verification six years after enactment of this Act for all employees not previously verified under such system.

Amends the Illegal Immigration Reform and Immigrant Responsibility Act of 1996 to extend the E-Verify program (formerly the basic pilot program) until two years after enactment of this Act.

Applies employment eligibility verification requirements to labor service agencies.

Revises civil and criminal penalty provisions.

Establishes in the Treasury the Employment Verification Compensation Fund.

Directs the Secretary to establish a publicly available contractor database.

Requires the Commissioner to report to Congress on Social Security card-based verification, including requirements for: (1) durable and machine-readable cards; (2) a unified database that specifies work authorizations; and (3) employer verification of new hires using the new Social Security cards and an electronic mechanism to seek verification.

Authorizes the Commissioner (subject to limits) to carry out verification responsibilities under this Act. Prohibits funds from the Federal Old-Age and Survivors Insurance Trust Fund or the Federal Disability Insurance Trust Fund from being used to carry out such responsibilities.

Sets forth other reporting requirements by the Secretary and the Commissioner.