Four men face being deported after they were arrested when immigration officials raided a Heysham restaurant and takeaway.
Masala Indian Cuisine could be fined up to £40,000 for employing the workers illegally.
Three Bangladeshi men, aged between 47 and 32, and a 30-year-old Indian man were held when Home Office Immigration Enforcement officers swooped on the Heysham Road premises on Sunday night.
After questioning, one was found to have entered the UK illegally, while the others had overstayed their visas.
The Home Office said all four were being detained while steps were taken to remove them from the country.
Karen McDonough, head of the Lancashire Immigration Enforcement Team, said: “Illegal working has a negative impact on communities.
“It defrauds the taxpayer, undercuts honest employers and cheats legitimate job seekers out of employment opportunities.
“We are happy to work with businesses to let them know what checks need to be made on staff, but those who break the law should know that they will face financial penalties.
“I would urge members of the public with information about suspected immigration abuse to get in touch.”
Masala Indian Cuisine will be served a notice warning that it faces a civil penalty of up to £10,000 per illegal worker employed.
The penalty will be imposed unless proof is provided that the correct right-to-work checks were carried out.