A new White House order that federal contractors verify employees' identity documents has some businesses sweating over the potential impact – especially California's huge food industry.

President Bush has ordered businesses and institutions with federal contracts – from janitorial companies to the state of California – to use E-Verify, a database that checks if workers' names, Social Security numbers or other ID match.

Under the Bush order, employers would have to fire workers whose identity doesn't square with Social Security Administration records. The computer system can't flag ID information that's been stolen, but it can detect false Social Security numbers used by illegal immigrants.

"We're concerned. It's still very much open how far back in the supply chain E-Verify would have to be used," said Rich Hudgins, president of the California Canning Peach Association.

His group's 500 members produce 80 percent of the nation's canned peaches, which are supplied to processors that sell most of them for federally subsidized school lunches.

An estimated 50 percent to 70 percent of farmworkers are suspected of being undocumented, particularly in fruit and vegetable production.

Groups like the peach farmers have until Aug. 11 to submit comments to the federal government about Bush's order and to ask questions. The rule won't go into effect until later this year, after the comments have been reviewed.

Government officials suggest the scope of the order may be more limited than businesses imagine. But in the meantime, industry representatives complain, it's unclear which employees they'll have to check.

Hudgins has asked the government to extend the public comment period 90 days. He said his members are harvesting and need time to develop questions.

If food companies feel they won't be able to comply with the order without firing workers and damaging their businesses, Hudgins said, "they might just take a pass on school lunch bids."

The U.S. food industry acknowledges that illegal immigrants are in their work force. Workers with fake documents began filling farm jobs as immigrants who had received amnesty in 1986 moved out, representatives say. The law hasn't required employers to check documents' authenticity.

Today, the food industry and other businesses with large immigrant work forces want to combine E-Verify with a program to allow undocumented workers to earn legal status.

Order applies to state, UC

California is usually first or second in the nation for federal contract dollars it receives.

Last year more than $44.5 billion in contracts flowed into the state for goods and services ranging from weapons and research to tree trimming and construction. Federally contracted food is sold to various federal agencies, including the the military and its commissaries.

Pacific Coast Producers, with fruit and vegetable processing plants in Lodi, Woodland and Oroville, sold almost $10 million worth of food to the Department of Agriculture last year.

Dick Ehrler, the company's human resources president, said he has been advised not to use E-Verify because of Social Security database errors, but he doesn't anticipate a "significant problem" when he starts using it.

"We've complied with all the legal requirements for hiring," he said.

The University of California and state government will also have to use E-Verify.

UC was awarded close to $2.2 billion in federal contracts in 2007, most of it for research and services for the Department of Energy, the National Institutes of Health, NASA and the Army. The California state government was awarded almost $20 million last year for food, legal and information services and operation of federal facilities for the Army and the Social Security Administration, among others.

Who would be checked

Only about 1 percent of U.S. businesses voluntarily use E-Verify. Congress made it available in 1996, but has limited it to new hires – not workers already on payrolls

Call The Bee's Susan Ferriss, (916) 321-1267.