The Small Firms Association is calling on the Government to change its approach to immigration policy, which it says is encouraging racism.
The SFA says despite the economic slowdown, large numbers of foreign workers are still needed to fill labour shortages.
Assistant director, Patricia Callan, says definitive legislation is needed "to give clarity to people with regard to how many foreign workers we are going to need.
Ms Callan said legislation was also required to decide on "sort of system we should operate in order to bring the right skills into the economy and to actually clarify for everybody in our society what rights and obligations are on all sides".