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Company directors should ensure they carry out proper checks on employees documentation or risk prosecution, as the Asylum and Nationality Act 2006 comes into force next month.
There are also new penalties facing employers who employ illegal immigrants, such as fines of up to £10,000 or a prison term of two years, explained multipurpose law firm Steeles Law.
Since May 1st 2004, there have been two separate lists of approved documents to check for each prospective employee including: a full UK or European Economic Area passport, a British birth certificate and a P45 or P60 confirming the persons National Insurance number.
A work permit and passport endorsed to show leave to enter or remain in the UK and permission to take up UK employment has also been acceptable.
The new Act repeals and replaces the Asylum and Immigration Act 1996 - the main measures of which, will come into force on February 29th 2008.
The government also plans to launch an advertising campaign warning employers of the punishments they can face for hiring illegal migrant workers.
"Employers can obtain a full list of approved documents from the Home Office," said Alison Davies, an associate in the London employment and immigration team of Steeles Law.
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