Immigration White Paper - what does it mean for employers?

The long-awaited immigration 2025 White Paper from the Labour government – “Restoring Control over the Immigration System” - has now been published.  The White Paper sets out a number of landmark proposals, with the overall stated aim of reducing migration into the UK.  This comes against the backdrop of a significant increase to overall net migration following the liberalisation of the business immigration system under the previous Conservative government after the UK’s departure from the EU.

There are several proposals in the White Paper that, if taken forward, will likely make it much more difficult for employers to secure skilled cross-border labour. It will also make it more difficult for skilled workers to regularise their status and stay in the UK long term. 

The aspects of the White Paper that are most likely to affect employers are set out below.

Increase of Immigration Skills Charge (ISC):

• Employers are required to pay an ISC when they sponsor a skilled worker to work in the UK (aside from a short list of exempted occupations, mainly scientists). This is to be increased for the first time since 2017, by 32%, with costs continuing to depend on whether the sponsor is a “small” or “medium/large” company under the Companies Act 2006:
  • Small or charitable Sponsors: Will now have to pay £480 for the first 12 months of employment, and an additional £420 for each additional 6 month period.
  • Medium or Large Sponsors: Will now have to pay £1,320 for first 12 months, and an additional £660 for each additional 6 month period.
• This is expected to take effect at some point in the 2025/2026 financial year, and will increase the cost of acquiring, and keeping skilled workers for employers.

Skilled Worker Visa Reforms:

• The overall skills threshold for skilled workers is to be raised, from RQF Level 3 (A-level equivalent) to RQF 6 (graduate equivalent) and above.  This will significantly reduce the number of roles that qualify for sponsorship.
• The current Immigration Salary List, which makes it easier to sponsor particular “in demand” roles, will be abolished. In the short term, a ‘Temporary Shortage List’ will be created to allow roles below RQF Level 6 where there is a long-term shortage to be filled in the meantime.  Again, the effect of this is that fewer roles and pay grades will be eligible for sponsorship.
• These changes are expected to take effect from the beginning of 2026, following consultation and the formal review being completed by the Migration Advisory Committee (“MAC”).  For the long term, the MAC are completing a review of the entire salary threshold for skilled workers.

Abolition of overseas recruitment for Social Care roles:

• Specific to the health and care sector, skilled worker visas will no longer be applicable to social carers under the ‘Health and Care Worker Visa’.
• A transition period until 2028 will be in place, where existing holders of this visa can renew their current visa, or switch to an alternative one. However, no new applications will be accepted.
• This will strongly impact the care industry, with no overseas applicants eligible for employer sponsorship to work in this role.

Extension of time-period required for Settlement:

• The previous minimum qualifying time period for acquiring indefinite leave to remain under a sponsored visa was 5 years’ lawful continuous residence. This qualifying period is to be increased to 10 years.
• A consultation is going to be completed later this year, to explore a points-based model to allow early settlement for individuals who have made significant ‘contributions to the UK economy and society’. The specifics of this remain to be seen.
• For Employers who recruit overseas, this is a serious disincentive to candidates as the amount of time it takes to settle in the UK will now be far longer. Employers will need to consider this for current sponsored employees and long-term planning, as well as how this might affect overseas recruitment drives.
• Further details are expected in late 2025 on this.

Reduction of time on Post-Study ‘Graduate Visa’:

• Currently benefitting from a 2 year stay, international graduates will only be able to stay and work in the UK without sponsorship for a reduced period of 18 months from late 2025 to early 2026.
• This means Graduates will have less time to switch over to a sponsored visa, and employers should be aware of these time limits in recruitment and in relation to current employees.

English Language Requirements:

• There are new English language requirements to be introduced across a number of immigration routes. These will apply to main applicants, and any dependants.
• An individual’s English skills will be tested on application, and monitored throughout their stay in the UK to track improvements.
• Recruitment processes of an employer should take into account these language requirements, with these changes expected in either 2025 or 2026.

Increased Compliance Penalties:

• There is expected to be a tightening of compliance rules on sponsor employers, with sponsors at risk of failing in their duties to be placed on improvement plans and having limits placed on who they can recruit.
• There will be stronger penalties and sanctions for employers sponsoring employees who have breached visa conditions, and were found to have contributed to that breach.
• More information on this is expected later in 2025.

Overall, this is part of a clear Government strategy to bring down migration (including work based migration) into the UK.  Cumulatively, these changes are likely to have a far reaching impact on UK employers who are already grappling with difficult market conditions.  Consultation will follow and it will be interesting to see how these proposals are taken forward in practice.