The regulation comes after a public consultation following revelations that construction firms had been unlawfully vetting workers.
The latest rules ban employers from blacklisting workers for trade union membership, trade union history or activities. Employment relations minister Lord Young said: "Blacklisting is underhand, unfair and blights people's lives. The regulations outlaw the compilation, dissemination and use of blacklists. They build on existing protections in the area, which are found in trade union and data protection law."
In March 2009 shocking revelations of a well used blacklist of construction workers triggered information industry calls for stronger safeguarding of people's private data.
Info pros welcomed the then information commissioner Richard Thomas's decision last year to prosecute private investigator Ian Kerr for secretly building an "extensive intelligence database" of over 3,000 construction workers.
Following this the government launched the consultation last summer to help improve the regulations. Subsequently, Kerr was fined [pounds sterling] 5,000 for breaching the Data Protection Act and told to pay [pounds sterling]1,187.20 costs.
As well as making it unlawful for organisations to refuse employment or sack individuals for appearing on a blacklist, the rules enable individuals or unions to pursue compensation or solicit action against those who compile, distribute or use blacklists.
Young said: "I am confident that this new piece of legislation will bring to an end the disreputable practice of blacklisting once and for all."