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The Immigration Act 2016 has received Royal Assent, introducing a range of measures to crack down on businesses that employ migrants illegally.
The Government said the aim of the new rules is to "tackle the exploitation of low-skilled workers".
Immigration minister James Brokenshire said: "Some employers seem to think that by employing workers who are less likely to complain, including vulnerable migrants, they can undercut the local labour market and mistreat them with impunity.
"The unscrupulous need to know that breaking the law is a high-risk activity and the full force of the state will be applied to them."
The Immigration Act 2016 makes a number of changes to the criminal offence of employing illegal workers. A Government factsheet on the new legislation says: "By making the test more objective we are making it easier to prove the offence."
The Act also introduces tougher sanctions on employers, increasing the maximum custodial sentence on indictment from two to five years.
Further, it introduces a completely new power to close premises for up to 48 hours where a business employs illegal migrants.
If the employer can prove that it has conducted the appropriate checks, the "closure notice" may be cancelled.
Where it cannot, the business may be placed under special compliance requirements, including a period of continued closure.
The Immigration Act also makes illegal working a criminal offence in