Employment Eye – July 2025

Immigration Update - Summary of Immigration White Paper

The Government’s long awaited Immigration White Paper has been published (12 May) setting out proposals for restoring control over the United Kingdom’s Immigration system. The paper provides plans for reforms with particular focus on legal migration and the aim of significantly reducing net migration. 

There is a clear intention to link the UK’s immigration system to skills and training, crack down on illegal working and support integration and community cohesion with new rules on English language and the contribution migrants bring to the UK.

Our summary of the key proposals and what this means for UK business and employers who hire staff from overseas: 

Skilled Workers (sponsored)

• The skills level for skilled workers will be lifted back to RQF level 6 (degree level) and salary thresholds will rise for new skilled workers for which the Migration Advisory Committee (MAC) are undertaking a thorough review. 
• The Immigration Skills Charge that sponsors are required to pay to sponsor a worker will increase by 32% to bring rates in line with inflation. This means sponsorship for one year will rise from £1,000 to £1,320, so an increase of £960 per employee for up to three years sponsorship. 
• English language requirements for skilled workers will increase from level B1 to B2 in accordance with the Common European Framework for Reference for Languages (CEFR). This means employees will need to demonstrate a higher English language proficiency.
• Social care visas under the Health & Care Worker route to new applicants from abroad will end with a transitional period until 2028 to allow for visa extensions and in-country switching for those already in the country with working rights; but this will be kept under review.
• There will be a new ‘Temporary Shortage List’ on MAC’s advice to provide time limited access to the points-based system where employers seeking to recruit from abroad are committed to playing their part in increasing recruitment from the domestic workforce.
• The Immigration Salary List which gives workers discounts from salary thresholds will be abolished and replaced by the Temporary Shortage List.
• The government will establish the Labour Market Evidence Group to draw on the best data available in order to make informed decisions about the state of the labour market and the role that different policies should play, rather than relying on migration.

Graduates

• Graduate visa holders’ time to remain in the UK after their studies will be reduced from the current 24 months to 18 months. In practice, employers will need to consider sponsorship six months earlier than they currently do. This will have an impact on business early talent careers schemes that are typically offered for two years. 
• Those who stay in the UK post study may be required to transition into graduate level jobs to demonstrate their contribution to the UK economy.

Settlement

• Those applying for settlement and citizenship under the points-based system will be expected to meet a new standard qualifying period for settlement from five years to ten years with the opportunity to reduce the qualifying period based on contributions to the UK economy and society, known as “earned settlement/citizenship”.
• A refresh of the Life in the UK test required for settlement in the UK is expected with further details to follow on how this operates in practice.
• There will be a continuation of shorter pathways to settlement for non-UK dependants of British citizens to five years, and retaining of existing safeguards to protect the vulnerable, including settlement rights for victims of domestic violence and abuse.

The reforms are indicative that the UK intends to “take back control” of its borders but the implications for UK business and employers who rely on a migrant workforce means reverting back to a higher skill level and more increases to salary thresholds. The recent Statement of Changes to the Immigration Rules (HC 997), published on 1 July expected to be effective from 22 July, detail the beginning of major immigration reform that will significantly impact skilled workers and employers who sponsor migrant workers under the current UK’s immigration points-based system. In reality, organisations will face further challenges when recruiting from overseas to fill vital vacancies while being forced to upskill their existing workforce and hire locally which is not always possible in some sectors, particularly healthcare. 

Employers will no doubt face higher sponsorship costs and work visas are likely to require higher salaries than those of domestic workers for the same job, so international recruitment will no longer be the “cheaper” or “easier” alternative. Critics of the Government’s proposals might say that labour shortages cannot be solved by training alone and that immigration policy requires long-term planning rather than reaction to political pressures.  However, the Government’s position is clear that immigration needs to be properly controlled and managed so the system is fair and works for UK. Future workforce needs must be considered in the upcoming changes, with wider consultation based on economic data to provide stability for employers so UK immigration can be advantageous to the country’s future growth.

Employment law 2025 – keeping you and your organisation up to date

There have been a number of notable developments since May’s edition of Employment Eye - below is a short recap on some of the key updates.

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If you would like further information on any of the topics discussed in this article, please contact a member of the Employment, Pensions and Immigration department who will be happy to help.