New legislation which will punish businesses caught employing illegal foreign workers has come into force.
Employers say they should not have to act as immigration officers
If employers are found to have knowingly hired illegal workers they could incur an unlimited fine and be sent to prison for up to two years.
The fines are part of the Immigration, Asylum and Nationality Act.
Small businesses have criticised the new legislation, because they fear it will require employers to act as "immigration officers".
Bosses caught employing illegal workers could face a £10,000 on the spot fine. Previously the maximum was £5,000.
The Home Office said the new civil penalties for employers who unknowingly hire illegal workers would allow it to save criminal prosecution for more serious cases.
The measures sit along side other changes being made as part of the biggest immigration shake-up for 40 years.
The UK will introduce an Australian-style points system that will allow the government to pinpoint immigrants with skills that will benefit the UK economy.
It will also make ID cards compulsory for foreign nationals.
The Federation of Small Businesses (FSB) said the new rules imposed unrealistic expectations and draconian fines on employers.
"It is totally unfair to expect small business owners to act as immigration officers," said Alan Tyrrell, FSB employment chairman.
The FSB said the act requires small businesses to understand and verify up to 13 different forms of identification when employing foreign workers.
When the new measures were announced in November, Home Secretary Jacqui Smith said the penalties were "a more effective way of dealing with employers who use slipshod or exploitative recruitment methods".
Families could also be affected by the changes to the law if they, for example, employ a nanny who turns out to be an illegal worker, said Kerry Garcia, an employment and immigration specialist at law firm Stevens and Bolton.
"There is a move toward making employers bear some of the burden on immigration and some employers resent this," said Ms Garcia.
She encouraged employers to check the documents of all new workers and make sure they have the right to work in the UK.
The UK's latest official annual immigration statistics showed record levels of people arriving in the UK and record numbers leaving.
Figures from the Office for National Statistics said 591,000 people migrated to the UK in 2006 while some 400,000 people moved overseas.