Illegal immigrants caught working in the UK will face up to six months in prison under plans unveiled in detail by the government today.
Late-night takeaways, pubs and off-licences have also been threatened with closure if they are found employing foreign workers who have no right to be in the country.
Immigration Minister James Brokenshire said the new law would help fight perceptions of the UK as a "soft touch" destination.
Details of the new law were revealed just days ahead of the latest immigration figures.
The new offence of illegal working allows wages to be seized as proceeds of crime, while those caught face time behind bars and an unlimited fine.
Certain businesses, including pubs, takeaways and corner shops, will have their licence to operate withdrawn if caught employing illegal immigrants - and government officials are considering whether to extend the power to include cab drivers and operators too.
Those charged with knowingly employing illegal workers will also face a bigger potential jail sentence, with the maximum raised from two to five years.
Meanwhile, banks will be forced to check current accounts against migrant databases, and private landlords who fail to remove illegal immigrants could face jail themselves.
Alp Mehmet, of Migration Watch UK, which campaigns for tighter immigration restrictions, welcomed the changes.