The public will be urged to call the Crimestoppers telephone number to report companies employing illegal immigrants, it has been revealed.
Plans include uniformed officers at ports and airports
And employers who consistently flout immigration rules could face having their assets seized.
The proposals are part of a number of plans to address "weaknesses" in the current immigration system, outlined by Home Secretary John Reid.
They also include plans to toughen border controls.
In a Commons statement, Mr Reid said the shake-up was a response to recent events which had "highlighted weaknesses" within the Immigration and Nationality Directorate (IND).
His predecessor Charles Clarke was sacked by Tony Blair after more than 1,000 foreign criminals were freed at the end of their prison sentences without being considered for deportation.
Speaking about the Crimestoppers plan, IND director general Lin Homer said: "We are talking about highlighting through Crimestoppers the way the public can bring to our attention issues that we need to follow up.
"There will be an easy and effective way for them to get things through to us to act on."
CBI deputy general John Cridland welcomed the idea of rogue employers being "brought to book".
"But it carries a risk of provoking malicious allegations and the police must prove to business that all such anonymous claims will be properly scrutinised," he added.
Mr Reid told MPs that under the reforms, there will be uniformed immigration officers at ports and airports - and by 2014 passport checks to ensure there is a record of who has left the UK.
Foreign national prisoners would be required to give evidence of nationality during contact with the criminal justice system, and criminality would be more clearly linked to deportation, he said.
The UK's borders would be strengthened, with "tougher" checks abroad so only those with permission can travel to Britain, while ensuring the numbers of people leaving were monitored.
There will be more enforcement powers, resources and new technology available to frontline staff.
The amount spent on enforcing immigration rules will be doubled by 2009-10.
Shadow home secretary David Davis accused Mr Reid of announcing "yet another restructuring of the IND".
Count everybody in and out of Britain by 2014
Border checks on people before they travel to the UK, including through the use of biometric visas
Give uniforms to immigration officers at ports and airports and give them more resources for surveillance
Ask people from the "highest risk countries" for biometric ID documents by 2008
By 2011, all non-European Economic Area citizens will have to have secure IDs before they are allowed to travel to Britain
Approve or remove 90% of asylum claimants within six months by end of 2011
Clear backlog of unresolved cases within five years or less
Expand detention and tag or monitor all asylum claimants
Double spending on enforcing immigration rules
Make people reveal their nationality if they go to court
"This is nothing new - we have been here before," he said.
"The government cannot cope with its own past. The serious problems faced by the IND aren't going to be solved by yet another reshuffling of the deck."
For the Lib Dems, Nick Clegg said ministers' pledge to clear the backlog of asylum cases would be just "paper shuffling" unless failed claimants were deported.
"After a decade without embarkation controls the government has now announced a further eight-year delay before controls are fully operational," he added.
Other plans announced as part of the shake-up included a requirement for travellers from the highest risk countries to have biometric ID papers by 2008, he said.
Embarkation controls which were partially lifted under the Conservatives in 1994, before being removed altogether when Labour came to office, will be reinstated by 2014.
Nine out of 10 asylum seekers will have their cases decided and concluded within six months of arriving in the UK.
All those who need to be deported will be removed within six months of arrival by the end of 2011, Mr Reid said.
And Stuart Hyde, an assistant chief constable with West Midlands Police, has joined IND as a new senior director for enforcement.