The SA Chamber of Commerce and Industry (Sacci) expressed concern on Tuesday over the latest unemployment figures.
According to Statistics SA (Stats SA), unemployment rose from 23.9 percent to 25.2 percent for the first three months of the year.
"The figures indicate that South Africa urgently needs business-friendly regulations to improve the competitiveness of local business," said Sacci spokesman Neren Rau.
"Unfortunately, the current set of legislative amendments before parliament largely introduces additional costs and burdens to business that would ultimately reduce future sustainable employment creation."
Rau said short-term service contracts could be affected by proposed amendments to the Labour Relations Act and the Basic Conditions of Employment Act.
This would restrict opportunities to contain costs and retain operational flexibility.
Broad unemployment -- which measures unemployed individuals as well as those who have given up looking for work -- rose from 35.4 percent to 36.6 percent, Stats SA said.
"A further clamping down on local business will mean that this figure will continue to grow," said Rau.
Trade union Solidarity said it was disappointed that unemployment had continued to grow, despite a record increase in jobs last year.
Compared with three years ago, there were around 421,000 fewer jobs, said Paul Joubert, economics researcher at the Solidarity Research Institute.
"There are still roughly 421,000 fewer jobs compared with three years ago, at the start of the recession."
The number of South Africans of working age (15-64 years) grew by approximately 500,000 every year, he said.
Joubert said four out of ten South Africans looking for work were unable to find suitable employment.
Employment numbers dropped sharply in 2009, during the recession.
Since then, employment levels had remained virtually constant, despite an upswing in economic growth.