Business groups and immigration lawyers say proposals to change work visa policy will hurt law-abiding firms in a bid to solve worker exploitation.
The government wants all companies to undergo accreditation before they can recruit an immigrant, which would look at firms' previous compliance with labour laws.
The immigration advisers' group, the Association for Migration and Investment, said accreditation being made compulsory would compound existing delays to hiring foreign labour.
"Firstly the employer who wants to employ a migrant, they will have to have made an application to become what is known as an accredited employer," chair June Ranson said.
"Now the fact that Immigration aren't able to keep up with the volumes now of applications going through - we can see the processing of an accreditation application stretching out to at least be three, four, five, six months.
"So you couple this with the fact that then an application is made for a work visa, employers could be waiting, eight, nine months. And that's not viable, it can't work.
"We do question as to how many of these companies out there are non-compliant to warrant such stringent assessments."
Business New Zealand chief executive Kirk Hope said some companies might get caught out by previous non-compliance with the complicated rules in the Holidays Act, which is estimated to have affected hundreds of thousands of workers.
"Businesses are very comfortable doing it [getting accreditation] but there are challenges and one of those areas might be for example Holidays Act compliance where we know that the legislation is a mess and it's currently under review," said Mr Hope.
"We certainly support Immigration New Zealand strengthening their compliance function, because nobody wants bad actors in the system
"But we don't want policy settings that treat all businesses as the lowest common denominator.
"We've got record low unemployment and persistence skill shortages. So there's a potential for a significant impact on business, if the policy settings change in a way that [affects] their ability to get those skills."
Employers and Manufacturers Association general manager of advocacy Alan McDonald said the government seemed to want to legislate for all employers when a fraction of them were responsible for exploitation.
"At the moment you don't have to become an accredited employer if you're only going for one or two employees and a year.
"But that's going to change so all employers who want to bring in immigrant workers will have to get accreditation.
"If you're a small business ... going to the market once a year or for one worker over a two or three year period, and you've got to get accredited and the accreditation already taking two months, and you're bringing in all these other employers into the scheme that's going to create significant delays so we have some real concerns about that."
Businesses would like to see work visas made longer so they had more certainty about staff.
The work market was so tight that other businesses were poaching newly arrived staff from their firms, he said.
The co-ordinator of the Union Network of Migrants and the Indian Workers' Association, Mandeep Singh Bela, said he too had concerns over delays, and accreditation was not enough to stop exploitation.
"It will not achieve the purpose - employers would still be able to exploit migrants, as they are currently doing so, and show on paper they are actually paying them a better rate," he said.
Work visas allowing immigrant to work in a specified region and profession would allow them to change jobs and speak out about exploitative employers, he said.
At the moment, employees can only work for a specified employer at a particular location.
Immigration Minister Iain Lees-Galloway announced in December that he wanted regional skills shortage lists, with industry responding to those labour gaps by stepping up training and education.
He also asked for opinions on increasing salary thresholds and reintroducing the rights of families of lower-skilled workers to join them in New Zealand.
The changes would increase the minimum salary of mid-skilled visa holders to that of the national median wage.
Mandeep Singh Bela said he welcomed the proposal to reintroduce the rights of lower skilled workers to bring their partners on a visitor visa and school aged children to have student visas.
He also hoped the government would scrap the 12-month stand down after three years of temporary visas for lower-skilled work visa holders.
Mr Lees-Galloway said 641 submissions were received during the consultation and decisions on the proposals would be announced in mid-2019.
The government wanted to ensure work visas reflected genuine skills shortages and to take serious action on migrant exploitation, he said.
It also wanted to help regions get the skilled workers they needed and said the review of vocational education would also contribute to that.