Hospitality employers face being hit with a £10,000 fine for each illegal worker they unwittingly hire after the Government confirmed that new rules will come into force from February 2008.
The Home Office has announced full details of its tough new immigration policy after completing a consultation with business.
Employers that knowingly hire illegal workers face unlimited fines and the threat of jail.
The Government said it would enhance the employment verification scheme that allows firms to check whether job candidates have the right to work in the UK.
The Home Office will also introduce a single border force at the UK's ports and airports, bringing together the Border and Immigration Agency, Customs and UK Visas. Foreign nationals will be forced to carry ID cards.
Home secretary Jacqui Smith said: "By stamping out illegal working, we are making the UK a less attractive destination for illegal migration. The new civil penalties are a more effective way of dealing with employers that use slipshod or exploitative recruitment methods."
Under the existing New Asylum and Immigration Act, the penalty for employing illegal staff is fixed at £2,000.
By Daniel Thomas