Employers suspected of employing illegal workers face 48-hour shutdowns under proposals set to be included in a new British immigration bill.
The measures aim to create a “hostile environment” for illegal migrants in the UK and cutting down opportunities for undocumented workers in the so-called “Black Economy”.
Employers such as takeaway restaurants, off-licenses and pubs who continue to flout immigration rules will also have their trading licenses cancelled.
The immigration bill is set to be announced this autumn after parliament resumes after the summer recess.
It comes as new figures are set to reveal this week that net migration to Britain has risen once again, past the 318,000 figure from last year.
The new Immigration Bill aims to make illegal working an offence, allowing the government to confiscate wages and imprison people.
The immigration minister, James Brokenshire, said: “Anyone who thinks the UK is a soft touch should be in no doubt – if you are here illegally, we will take action to stop you from working, renting a flat, opening a bank account or driving a car.
“Through our new immigration bill, illegal workers will face the prospect of a prison term and rogue employers could have their businesses closed, have their licences removed, or face prosecution if they continue to flout the law.”
Employers too will be held responsible as much as undocumented workers.
A Home Office spokesman said: “We will lower the existing evidence requirement to prove this offence in order to boost prosecutions and increase the current maximum sentence from two to five years.
“These powers will operate alongside the existing system of heavy financial penalties.
“Any employer who continues to flout the law and evade sanctions could see their business closed for up to 48 hours while they prove right-to-work checks have been conducted on staff.
“The worst offenders would then be placed under special measures as directed by the court, which could lead to continued closure and compliance checks.”
Ministers are also considering making minicab drivers and operators subject to new powers to strip trading licences from those who fail to comply with immigration laws.