Companies employing illegal workers will face on-the-spot fines.

New legislation on the employment of illegal workers in the UK came into effect last week which could potentially have a major impact on the construction industry.

The UK announced last week the biggest shake-up of the immigration system in 45 years, with the introduction of a new points system to ensure only the best can work in Britain, new licenses for businesses who want to employ migrants and big on-the-spot fines for those not obeying the rules and found hiring illegal workers.

Section 8 of the Asylum and Immigration Act 1996, which currently sets out the law on prevention of illegal migrant working in the UK, has been repealed and replaced by Sections 15 to 25 of the Immigration, Asylum and Nationality Act 2006.

Under the new law, employers who employ someone subject to immigration control aged 16 or older who is not entitled to undertake the work in question will be liable to pay a civil penalty. It will be a criminal offence to “knowingly” employ an illegal migrant.

Immigration Minister Liam Byrne said on Friday: “Today sees the start of our points system and the beginning of on-the-spot fines for businesses who employ illegal workers, introduced a day ahead of schedule.

“New £10,000 penalties mean instant justice for those firms who try and undercut others by employing illegal immigrants. With the new compulsory identity cards for foreign nationals later in the year, there can be no excuse for not checking the identity of those applying for jobs.

“The key to shutting down illegal immigration is to shut down illegal jobs. Last year we stepped up our illegal working operations by 40%. Now our enforcement teams have a host of new powers to shut down dodgy bosses who draw illegal immigrants to Britain.”

Construction union UCATT has said that a “fair proportion” of the 40,000 migrant workers in London alone are illegal. The changes will come into effect for employees who started working on or after 29 February 2008.