Today, police can only raid businesses if they have reason to suspect a crime. The new measure will allow them to carry out inspections if they believe there is a risk that people are working there without immigration papers.
The new measures will also double the fines for those who employ people without the necessary work permits.
"The idea is that those who employ these people, who often find themselves in a vulnerable situation, should feel some pain," Justice Minister Morgan Johansson told Swedish news agency TT on Thursday.
Other measures include making it easier for police to take fingerprints during routine checks on immigrants and allowing police to seize passports and other forms of ID.
Additionally, the government plans to carry out an assessment on the misuse of the temporary passports, travel documents, and residency cards issued to immigrants.
Sweden's Migration Agency expects 33,000 people to go into hiding after having their applications for asylum rejected over the coming three years.
At the end of 2016, police were officially on the lookout for 12,606 people who faced deportation.
According to the Migration Agency, border police efforts have been hampered by a shortage of secure facilities.
"It is a problem when police catch a hidden person after an investigation and the person is deemed at high risk of disappearing again, but they cannot be taken into custody," said the Agency in a press release.