Financial penalties for employing illegal workers are to be increased from £10,000 to £20,000. The maximum fine for employers not paying the national minimum wage will also rise from £5,000 to £20,000 and a penalty can be applied to each worker being underpaid. These changes will come into effect from May 2014.
Another part of the legislation is a ban on advertising jobs in other EU countries without simultaneously advertising them in Britain and in English.
Prime minister David Cameron said the changes were designed to give British workers "a fair crack of the whip" in the job markets.
"The changes we are making today will help stop practices which exploit vulnerable workers and undercut local businesses that play by the rules. That means more economic security for people across our country," Cameron said.
The Recruitment and Employment Confederation (REC) launched its own Good Recruitment campaign this week.
CEO Kevin Green called the changes "sensible". "Recruiters have millions of people walking through their doors looking for work every day,” he said. “Whether those people are UK nationals or EU migrants is secondary to the ultimate goal of getting the right people into the right job at the right time.”
The Gangmasters Licensing Authority (GLA) is to be become part of the Home Office under the reforms. It was previously part of the Department for Food and Rural Affairs (DEFRA). It will have its powers extended to enforce the new legislation.
The GLA was set up in 2004 to protect employees after the Morecambe Bay disaster, in which 23 Chinese cockle pickers drowned from an incoming tide.
Green welcomed this change, saying the GLA was "more suited" to the Home Office then DEFRA.
