Restaurateur Price Beall said he always willingly met government requirements to verify the legal status of employees at his three Truffles restaurants on Hilton Head Island and in Bluffton.
Even though he's happy to comply with the South Carolina Illegal Immigration Reform Act, he said, completing the new verification process has proven frustrating, time-consuming and costly.
He estimates an office worker will have to devote three hours per week overseeing the issue, which could cost $5,000 to $6,000 per year.
"It's not that simple," he said. "You don't think it's that big a deal, but then you start adding it up."
He recently spent about $500 to train a new hire for a week only to see that worker disappear during the vetting process.
The law allows employers with 100 or more employees to either use E-Verify -- a voluntary, federal system that checks workers' information -- or require each new hire to show a driver's license or identification card from a qualifying state.
Companies with fewer than 100 employees must begin complying with the new regulations by July 1, 2010.
Beall said he thought employers could switch back and forth between those two methods.
However, as soon as he attempted to hire a worker from a state that wasn't on the approved list of about 20, he discovered employers who use E-Verify must check all new hires that way.
The state system also gives employers five days after a hire to complete verification, whereas the federal check must be done within three days.
He thinks lawmakers didn't realize the consequences the law would have for businesses.
"The state law should just say you have to E-Verify everybody," he said.
Meanwhile, attorneys across the state also are expressing concern state regulators could be overstepping their authority to enforce the act, said Melissa Azallion, an immigration lawyer and partner in the Nexsen Pruet firm.
In some cases, auditors show up unannounced and ask for documents that aren't covered under the law, she said.
Even though the law applies only to workers hired after July 1, some auditors have asked to see lists of everyone who works at a business, she said.
Such procedures are allowed only if they believe an employer has knowingly and intentionally hired an unauthorized worker, Azallion said.
Her law firm, which participated in educational seminars before the law took effect, sent employers an e-mail alert this week advising them of the auditing practices and asking if the state was going too far.
"Some of those things weren't in accordance with what we've trained on," she said.
A handful of audits have occurred in Beaufort County, Azallion said, but she declined to say where.
In addition, Beaufort County has its own ordinance that allows the county to conduct random audits of businesses' I-9 immigration forms. Firms found in violation could lose their county business licenses.
Attorneys from around the state are in ongoing discussions with the state department about their concerns, Azallion said.
Jim Knight, a spokesman for the state Department of Labor, Licensing and Regulation, could not be reached Friday for comment.