"Nobody was willing to put any money into it," Crandall said.
In South Carolina, by contrast, Knight said his office has completed 4,500 random audits of businesses so far this year, finding a 94 percent compliance rate among businesses.
The Office of Immigrant Worker Compliance there cited 41 businesses for failing to check new hires against E-Verify, put them on probation and had them enroll with E-Verify, according to data on the office's website.
But just because a business is enrolled in E-Verify does not mean they are using it, Pace said.
"A lot of time they sign-up, but with the economy the way it is, they don't use it," she said.
Small businesses, in particular, claim E-Verify is an unfair financial and legal burden, causing many to simply ignore the mandate, experts say.
"Small businesses don't have lawyers on staff or HR [human resources] departments to handle this," said Alex Nowrasteh, a Cato Institute immigration policy analyst. "Big businesses have that and it won't cost them a lot more to verify."
Nowrasteh's report, "The Economic Case Against Arizona's Immigration Laws," put the cost of a single E-Verify query at $147, for labor, paperwork and additional steps an employer might take to fully comply with the law.
With many small businesses operating on slimmer profit margins, Nowrasteh said he was surprised that 19 percent of Arizona firms with four or fewer employees were enrolled in E-Verify.
"I'm surprised that it is that high," he said. "It shows how conscientious some small-business owners are, even when it is financially devastating for them."
For Anna Johnson, who owns Super Embroidery and Screenprinting in Phoenix, participating in E-Verify makes business sense.
She recalled the day in 1996 when the Immigration and Naturalization Service notified Johnson that a random audit of her staff had been scheduled: After that, 28 of her roughly 50 employees did not show up to work again.
Their disappearance cost Johnson more than just a large portion of her staff, as she faced the challenge of finding and training new workers.
"That cost me hundreds of thousands of dollars' worth of business," Johnson said. "It takes about six months for an operator to know what they're doing. It isn't something that you just do."
Johnson began using E-Verify at sbout 2005, when it was still a voluntary federal system. Now enrolled under the state law, Johnson said she feels more secure when hiring. If she was not using E-Verify and was audited again, she "would be scared to death."
Johnson downplays issues with E-Verify."It is not a burden at all," she said. "You have to fill out paperwork anyways for the state with every employee that you hire. So how is it any different from already having to do that?"