Described by Home Secretary Yvette Cooper as a “complete reset”, the changes have been crafted to encourage investment back into the UK labour market and discourage UK employers’ reliance on international workers, and mark the most significant overhaul of the UK’s immigration framework since 2020.

As immigration is a reserved matter, the reforms passed in Westminster will apply across the UK, including Northern Ireland. Therefore, employers who rely on international talent to drive their workforce should act now to understand and prepare for the introduction of the new rules.

Key Reforms for Employers

Skilled Worker Visa – Higher Entry Requirements

One of the most significant reforms proposed in the White Paper is the overhaul of the widely popular Skilled Worker visa, which focuses on the following substantial changes:

1. Skill threshold: Since 2020, the minimum skill threshold required for Skilled Worker visa eligibility under the current ‘points-based’ system has been RQF Level 3 (equivalent to A-Level). However, this threshold is set to rise back to RQF Level 6 (Bachelor’s degree level).
2. Salary requirements: To reflect this higher skill requirement, the minimum salary threshold for sponsored roles will increase from £38,700 to £41,700 (or from £34,830 to £37,500 for those applicants holding a PhD relevant to the occupation for which they are being sponsored).
3. Reduction in jobs eligible for sponsorship: The Home Secretary has confirmed that the incoming reforms are set to cut an estimated 100-180 roles from the current list of occupations available for sponsorship.

Additionally, the Home Office intends to abolish the current Immigration Salary List, which outlines specific occupations meriting a reduced salary threshold due to demand for international workers in order to address skill deficiencies in the UK labour market. In its place, a ‘Temporary Shortage Occupation List; will be introduced, featuring a limited list of certain sub-degree level roles (i.e. those requiring a skill level below RQF Level 6/degree level) that the Department for Business and Trade and HM Treasury have identified as being particularly scarce in the UK labour market.

However, employers should note that the Temporary Shortage Occupation List will be strictly tied to sectors targeted in the Labour Government’s ‘Modern Industrial Strategy’, such as clean energy, digital technology, advanced manufacturing and life sciences. Employers should note that the Temporary Shortage List will only be available for a transitional period, expected to last until the end of 2026, however the Home Secretary has confirmed that this could be brought forward.

Whilst these changes are focused on making visa sponsorship less accessible to UK employers, further changes are due to be introduced that will make the Skilled Worker route less appealing to prospective immigrants, including the increase in minimum English language requirements (from CEFR Level B1 to B2 across reading, writing, speaking, and listening) and the removal of the right to bring dependents under Skilled Worker visas obtained through the Temporary Shortage List.

Closure of the Health and Care Worker Visa

Introduced during the COVID-19 pandemic to address acute labour shortages, this route will be closed to new applicants from 22 July 2025.

Those already in the UK under this visa and working in social care can extend or switch to an alternative visa route until 2028. Employers within this industry should inform and support affected workers in planning ahead.

Graduate Route Constricted

Following completion of their studies in the UK under a Student visa, applicants seeking to convert to a Graduate visa to allow them to continue living and working in the UK will only be permitted to do so for a period of 18 months, as opposed to the current two-to-three-year duration. The Home Secretary has also noted that the government are actively considering the introduction of a 6% levy on the income of higher education providers that is directly derived from international student tuition fees.

Increase in Immigration Skills Charge

The Immigration Skills Charge, which sponsors must pay when hiring a migrant worker for more than six months will rise by 32%. This will see the fees increase from £1,000 to £1,320 for medium/large sponsors and from £364 to £480 per year for small or charitable organisations.

Settlement Rules Replaced by ‘Contributions-Based’ Model

The current automatic qualification for Indefinite Leave to Remain (ILR) after five years of continuous lawful work in the UK will end. The Home Office is set to introduce a new model to assess settlement eligibility which will require a minimum of ten years of residence and assessment of the applicant’s contributions to the UK economy. The information provided at this stage is limited, but it is anticipated that certain high-value roles may be able to qualify for citizenship sooner.

When Will These Changes Take Effect?

On 1 July 2025, the Home Secretary announced that, subject to Parliamentary approval the following immigration reforms will take effect on 22 July 2025:

• Closure of the Health and Social Care visa to new applicants;
• Introduction of the Temporary Shortage List;
• Removal of the Immigration Salary List; and
• Increased Skilled Worker salary thresholds.

Further changes, including increases to the Immigration Skills Charge, enhanced English language requirements and more robust family policies can be expected to come into force by the end of 2025.

However, at present it is unclear when changes to the settlement criteria can be expected, as this will require the Home Office will need to take time to establish the points-based test, publish guidance and updated forms and train caseworkers to process the applications before these changes can be enacted.

Conclusion

The proposed reforms mark a decisive shift in UK immigration policy, aiming to reduce the overall appetite of employers and prospective immigrant workers for business immigration by raising the barriers to entry for many mid-skilled roles. As such, employers in Northern Ireland should act swiftly to understand the implications for the new rules and prepare their workforce and business for the incoming changes. In terms of immediate action points, in order to mitigate risk and disruption, employers should:

• Audit visa holders’ salaries: These may need to be amended urgently to satisfy the higher salary requirements coming into force on 22 July 2025.
• Assess RQF levels of sponsored roles: Check whether roles filled, or intended to be filled by sponsored workers will remain eligible for the Skilled Worker visa. Workers sponsored prior to 22 July 2025 may retain eligibility to renew their visa or their visa route or employment, even if the role is later removed.
• Prioritise upcoming applications: Expedite upcoming visa applications where possible (e.g. for new hires or transitioning routes) to mitigate the impact of the new restrictions.
• Encourage early ILR applications: Where any sponsored employees are nearing the 5-year mark for settlement eligibility, they should be encouraged to apply for ILR before the higher eligibility criteria is introduced.
• Support and communicate proactively with visa holders: Keep international employees informed, reassure them where possible and provide guidance on what the changes will mean for them. For employers currently sponsoring workers on Health and Social Care visas, it is particularly pertinent to inform them of the closure of the route on 22 July 2025 and assist them in exploring options for in-country switching to alternative visa routes. Under the new rules, employers are required to maintain evidence of their continuous employment of health and social care workers for at least 3 months;
• Update internal processes: Revise HR materials, sponsorship templates, recruitment guidance and training procedures to reflect and update all relevant staff.
• Monitor updates: Engage with any upcoming government consultations so far as possible and keep track of any forthcoming announcements or materials released.
• Prepare for talent shortages: Plan strategically to address the potential skill gaps which are expected to be felt in the construction, care, tech and engineering sectors, where migrant labour has historically played a key role.

If you require further information on this topic, please contact a member of the Employment Group or your usual Arthur Cox contact.