Employers who knowingly take on illegal workers will soon face prison or an unlimited fine as punishment, according to the Home Office.
It has published a consultation this week outlining new measures to tackle the problem of illegal working in the UK and comes shortly after the Border and Immigration Agency announced methods such as stronger border controls to minimise illegal immigration.
A pilot will take place to aid businesses in finding out whether migrants are legally able to work before biometric checking services and compulsory ID cards for immigrants are launched.
Immigration minister Liam Byrne said it is no longer enough to stop illegal immigrants from entering the country and that a crackdown on illegal jobs attractive to migrants is needed.
He added: "That means making it easier for companies to check whether someone is here legally - but also coming down much harder on businesses which break the rules or turn a blind eye."
The Home Office is also set to launch an awareness campaign on the subject of illegal working targeted at employers, which will take advantage of the national media and direct mail to keep businesses informed of their duties.
New draft EU legislation announced this week could see members of the public fined for employing illegal immigrants in roles such as gardeners, nannies and plumbers without undertaking the relevant checks beforehand.