Columbia -- As South Carolina begins today cracking down on small businesses that employee illegal immigrants, Marlene Magana figures an auditor soon will be at her Mexican restaurant in northeast Columbia.

And she expects to lose some employees as a result.

"It breaks my heart," said Magana, who owns Monterrey Mexican Restaurant. "These are people who are working to feed other people. These are hard-working people who don't bother anybody."

The final piece of the state's 2008 Illegal Immigration Reform Act falls into place as the state tries to run off illegal immigrants by preventing them from finding jobs.

The S.C. Department of Labor, Licensing and Regulation now will audit the employment records of small businesses that must ask new employees for proof of their legal status. Already, the agency has audited hundreds of larger businesses by checking hiring practices and asking owners to sign affidavits to say they do not knowingly employ illegal immigrants.

The law change will have a sweeping impact in South Carolina's business landscape, which includes 110,000 companies with fewer than 100 employees.

The labor and licensing department has made it clear that its 23 auditors will target businesses that traditionally hire illegal immigrants - restaurants, hotels, landscapers and construction companies.

In Richland County, 25,000 people work in the hospitality industry, and most are employed by small businesses.

The auditors also will follow up on complaints from the public about businesses suspected of hiring illegal immigrants.

"If they are working in South Carolina and they are illegal, it's the intent of this law for them to lose their jobs," said Jim Knight, a labor department spokesman.

That's why Magana expects at least some of her employees will end up quitting or getting fired.

"I'll end up getting charged a fine or paying a penalty," she said. "I have to let go of people."

The law requires employers to verify status through one of two means. They can enroll in the federal government's E-verify program, which cross-checks names and Social Security numbers. Or they can accept a South Carolina driver's license or a license from one of 26 other states on a list approved by the S.C. Department of Motor Vehicles.

Businesses only have to take this step for newly hired employees. State auditors will not review employment records of workers hired before July 1, but they will ask business owners to sign a document saying they do not knowingly employ illegal immigrants, Knight said.

Anyone caught lying on that document is subject to a felony charge, he said.

Businesses that are not following the law could be fined $100 to $1,000 per worker, although there is an appeals process. Thus far, only one S.C. business has paid a significant fine and risked losing its license to operate in the state, Knight said. However, 114 businesses have been cited since audits began July 1, 2009, according to LLR's website.

Knight and immigration attorneys have hosted dozens of seminars across the state to explain the law changes to business owners. Still, Knight expects some businesses to be caught off guard.

"Every employer was put on notice," he said. "I don't know what more we could do."

Tammy Besherse, an attorney at S.C. Appleseed Legal Justice Center who advocates for immigrants, fears the law change will result in more discrimination against Hispanics. There are foreign workers who have legal work permits, but some employers may not hire them because of concerns over the new law.

She also is concerned about how the Labor Department will handle public complaints against businesses that are suspected to have illegal immigrant workers.

"I worry that too many people will say, 'That person looks Latino, and I'm going to report them to LLR,' " Besherse said. "It would be a shame if LLR uses that as its only basis to investigate."