Starting Sept. 8, only those firms that use the government's E-Verify system, which compares names and Social Security numbers with a government database and determines whether employees are in the country legally and are authorized to work, will be eligible for federal contracts.

The program, which is unpopular in the business community, will cut across all sectors of the economy, affecting about 170,000 companies, from health care to construction to weapons makers, as well as many other industries that receive government business or federal stimulus funds.