Small businesses face fines of £10,000 if they are caught employing people who should not be in the UK even if they did so in good faith, after new legislation came into force.

Under the Immigration, Asylum and Nationality Act, small business owners will have to be able to understand up to 13 possible forms of identification, including recognising passports from 27 EU member states, to check the right of that person to live and work in the UK.

The Federation of Small Businesses criticised the complexity of the legislation and the lack of publicity about the new rules.

"Immigration policy and the implementation of it is a matter for the government, not for small business owners," said Alan Tyrrell, FSB employment chairman.

"Expecting small employers to understand and implement complicated immigration rules is ludicrous," he added. "The guidance notes alone for this piece of legislation run to nearly 30 pages."