People who work illegally in Britain will face up to six months in prison, under proposals to be included in a new Immigration Bill, the media reported on Tuesday.
The bill, to be introduced later this year, will also contain measures against take-away restaurants and off-licences which employ illegal migrants, BBC reported.
Immigration Minister James Brokenshire said the government "would continue to crack down on abuse" of the system.
"Anyone who thinks the country 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."
"As a one nation government we will continue to crack down on abuse and build an immigration system that works in the best interests of the British people and those who play by the rules," the minister added.
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The maximum sentence for employers found guilty will be raised from two to five years, in addition to the fines already in force.
Earlier this month, the government also announced that landlords in England will be expected to evict tenants who lose the right to live in Britain, also under the proposed Immigration Bill.
Landlords will be able to end tenancies, sometimes without a court order, when asylum requests fail, and will be required to check a migrant's status in advance of agreeing a lease. Repeat offenders could face up to five years in prison.
