Employers have little more than a week to prepare for new immigration rules that could result in a large fine or even a prison sentence.

The new Immigration, Asylum and Nationality Act 2006 comes into force on 1 March. It is targeted at any business that knowingly employs or exploits illegal workers, and could lead to fines of up to 2,000, as well as a custodial sentence of up to two years.

The way businesses can employ foreign workers will change, with a points-based system replacing the current arrangement, which some lambast as being over-complicated. Under the new rules, migrants will be categorised into five levels based on skills and experience.

The new rules coming into effect later this month place a heavy burden of responsibility upon all employers to ensure that all the workers they employ are legally entitled to be here in the UK, says Janice Leggett, immigration manager at Wollastons LLP. Tough civil and criminal penalties will be enforceable on organisations that continue to employ or are negligent in employing illegal workers.

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