The Immigration Skills Gap – What this means for employers?

Following the Immigration White Paper published earlier in May 2025 highlighting the potential changes to immigration rules, the UK will, with effect from 22 July 2025, see the first of the “sweeping reforms to the immigration system”. The Government hopes that this will address the growing public and political immigration concerns.

The changes aim to reduce net migration and focus on higher-skilled workers. 

In a nutshell, the key changes include: 

1. Immigration Salary List (ISL) & Interim Temporary Shortage List (ITSL) – The ISL will be phased out albeit it will remain in force until December 2026. In the interim, the ITSL will sit alongside the ISL with a view to only allowing non-domestic recruitment (with restrictions on bringing dependants) where occupations are key to infrastructure or industrial strategy;
2. Increase to the skills threshold - For Skilled Worker Visas the skills threshold will increase from RQF 3 (A level equivalent) to RQF 6 (degree level equivalent). This change will see the removal of 112 eligible occupations across all sectors. It is worth noting that a transition period will apply allowing skilled workers to continue to be sponsored in RQF 3-5 provided they already have a visa or, have a Certificate of Sponsorship issued before 22 July 2025. This applies even where the occupation does not feature on the ISL or the ITSL;
3. Salary threshold – For general skilled worker applicants after April 2024, this is set to increase from £38,700 to £41,700. For skilled worker applicants before April 2024, the general salary threshold will increase from £29,000 to £31,300. It is worth noting that most applicants on a Health and Care Visa, who are either new to the route or extending or switching their visas and are paid according to the national pay scales, will still need to be paid at their relevant pay scale or £25,000, whichever is higher;
4. Closing the Social Care Worker Visa – This will see the closing of the social care worker visa route to overseas recruitment for new applicants, which marks a significant policy change from recent dependence on international recruitment. The commitment is to address workforce challenges through domestic labour market reforms instead;
5. A 32% increase in the Immigration Skills Charge (ISC) – Currently employers are required to pay, for medium and large businesses, an ISC of £1,000 for the first 12 months, and an additional £500 for every 6 months thereafter. This 32% increase will no doubt place additional financial burdens on employers; and
6. UK Settlement – This will see an increase to the qualifying period for settlement in the UK from 5 to 10 years. 

Action for employers

Given the anticipated impact of the suggested changes, we urge employers to proactively assess how these proposals will affect their current and future recruitment and sponsorship plans by implementing the following simple steps: 

1. Identify staff impacted by the upcoming changes and hold comms about what these changes mean for them;
2. Issue Certificate of Sponsorships for new or renewing visa applications before 22 July 2025 to ensure that these are not caught out by the new rules; and
3. Review roles on the ISL and ITSL to ascertain RQF level 3-5 roles which are relevant to your business, but no longer feature on these lists, as these roles will no longer be eligible for sponsorship. In turn this will mean that domestic recruitment strategies will need to be in place to address any staff shortage your business may experience.

All that being said, please note that the sponsorship route remains a viable option and will allow employers to access skilled international workers both now and under any new systems, provided you put in place adequate strategies. Employers are advised to bring forward any international recruitment to ensure (as highlighted above) that they are not caught out by any changes to immigration laws. 

If businesses require any further assistance or support in connection with visas or the right to work more generally, please contact a member of the Employment team.

This article is part of our Legally FM article series, to read more from this series please click here.