This month, the pattern is clear: immigration and compliance are moving faster, going digital, and demanding immediate employer action. From biometric entry checks at EU borders to new eVisas and electronic pre-approvals in the UK and Malaysia, the pace of regulatory change leaves less margin for delay or error.
Some countries are also clamping down on flexible arrangements, closing or suspending freelance, contractor, and temp staffing options, and tightening who can qualify for visas or employment status. But the reality is fragmented: there’s no single global trend, just more scrutiny and a higher bar in many markets.
Meanwhile, payroll, reporting, and employment costs are on the rise, with new levies in Slovenia, higher salary thresholds in the Netherlands and Poland, and major retroactive payroll reform in the US.
In this edition, we focus on the changes that matter, not just what’s new, but where you’ll need to adjust your processes, planning, or policies right now.
United States: Payroll and Tax Law Overhaul
On 4 July 2025, the “One Big Beautiful Bill Act” (H.R.1) became law, delivering a sweeping reset of US payroll, tax reporting, and benefits compliance, retroactive to 1 January 2025.
- Retroactive Deductions for Tips and Overtime
Employees can now claim significant new federal tax deductions: up to $25,000 for qualified tips and up to $12,500 for qualified overtime pay ($25,000 for joint filers), all retroactive to the start of the year. Employers must recalculate payroll reports and communicate the new rules to affected staff. - W-2 and 1099 Reporting Overhaul
Qualified tips and overtime must be reported separately on wage statements. The Form 1099-NEC threshold rises to $2,000 for payments made in 2026, impacting contractor reporting and payroll system logic. - Stricter Penalties and Audits
The IRS will enforce higher penalties for late or inaccurate reporting. Random audits are expected to increase under the new law. - Other Benefit Changes
Updates to Dependent Care FSA and HSA limits and employer reporting obligations are now in force.
Employers, including multinationals with US operations, must immediately audit payroll systems for compliance, reissue any affected wage statements, and coordinate with tax advisors. Retroactive elements demand urgent attention to avoid penalties, especially for high-volume employers and EOR providers.
Netherlands: Highly-Skilled Migrant Scheme Facing Stricter Sponsorship Rules
The Dutch government is advancing plans to tighten the highly-skilled migrant scheme, with a wave of proposed reforms targeting salary levels, sponsor eligibility, and anti-abuse measures. Key proposals include the following.
Tougher Sponsor Criteria
Companies applying for or maintaining “authorised sponsor” status with the IND will face stricter scrutiny of financial stability and leadership integrity. The IND may also withdraw sponsor status sooner, after two consecutive years of inactivity, instead of the current three.
Higher Salary Thresholds
Minimum salary requirements are set to rise, especially for highly-skilled migrants under 30 and recent graduates. For example, the monthly salary floor for those under 30 is proposed to increase to EUR 4,551 (2025 rate), and for recent graduates, to match average Dutch graduate salaries. Lower salary thresholds may only apply for up to three years post-graduation.
Market Conformity Test Strengthened
The IND and UWV are set to enforce a more robust “market conformity” test, ensuring salaries genuinely reflect the Dutch labour market and aren’t artificially inflated just to meet permit conditions.
These proposals follow earlier steps to restrict “payrolling” and tighten rules around temporary employment and the 30% tax ruling. The aim is to prevent misuse, maintain labour market integrity, and focus the scheme on truly scarce and qualified talent.
Employers will face increased costs for young and graduate hires, closer examination of company health when seeking sponsor status, and stricter enforcement around the substance of job offers. Now is the time to audit existing sponsor registrations, salary offers, and contract renewal timelines in anticipation of these changes.
Poland: New Foreign Hiring Framework in Force
Poland’s new regulatory framework for hiring foreign nationals took effect on 1 June 2025, introducing tighter controls and full digitalisation
- Contracts: Written contracts (with certified translations) are now mandatory for all foreign staff and must be retained for two years.
- Full Digitalisation: All work permit and employment notifications are processed exclusively via the national portal.
- Schengen/Visa Waiver Exclusion: Foreigners entering Poland on short-stay visas or visa-free cannot be employed, no exceptions.
- Enforcement: Expect stepped-up audits and targeted reviews, especially around outsourcing and B2B contracts.
- Labour Market Test Removed: Blanket tests are gone, but local authorities can now issue immediate role-specific bans.
The compliance burden has shifted: documentation, process, and status checks must now withstand digital scrutiny and on-demand audits. Failure to adapt exposes employers to substantial fines, retroactive penalties, and possible exclusion from future foreign hiring. There is no transition period.
Colombia: New Employment Rules Drive Up Costs and Tighten Controls
From 25 June 2025, Colombia’s employment landscape has fundamentally shifted. The government has introduced comprehensive changes to labour regulations, raising baseline costs and tightening compliance standards for all employers.
Night Work Premiums: Night shift pay now applies from 7:00 p.m., not 9:00 p.m., increasing wage costs for evening operations. The change takes effect six months after the law date.
Sunday and Holiday Rates: Extra pay for work on Sundays and public holidays will rise in stages, moving from 75% to 100% by 2027, with the first increase to 80% this July.
Apprentice Employment: Apprentices must now receive full pay and benefits, no longer a reduced-cost category.
Disability Hiring Requirements: Minimum quotas for employing people with disabilities are now law, with gradual implementation from July 2026.
Employment Contracts: Open-ended contracts become the standard; fixed-term arrangements face new limits and can’t exceed four years including renewals.
Staffing Restrictions: Staffing Restrictions: Colombia’s new law reaffirms that only authorised temporary staffing agencies may supply personnel on a contingent basis. Employer of Record (EOR) arrangements, where a third-party employs staff on behalf of a client, cannot be used to supply temporary or outsourced workers to client sites in Colombia.
EOR arrangements are limited to direct employment and payroll management for assigned staff. Employers relying on EOR or contractor supply structures must review all deployments to ensure they do not cross into restricted temporary staffing territory, as enforcement and penalties are tightening under the new regulations.
Expanded Leave and HR Records: Employees now receive paid time off for health and family reasons. Overtime approval is easier, but documentation requirements remain strict.
Platform Worker Status: Digital platform workers may be classified as employees or contractors depending on the relationship, affecting payroll and social security contributions.
Organisations with staff in Colombia must budget for higher employment costs, review contracts and HR policies, and prepare for more active labour inspections. Some rules are immediate, while others will phase in over the next two years.
United Kingdom: Major Immigration Overhaul Now in Force
The UK’s new immigration rules took effect on 22 July 2025, sharply reducing sponsorship options for mid- and lower-skill roles and raising cost and compliance barriers for employers.
Key changes
- Eligibility tightened: Only graduate-level roles (RQF 6+) can now be sponsored under the Skilled Worker visa. Most non-graduate positions are excluded, with a small number temporarily allowed under the new Temporary Shortage List (TSL), due to expire by end-2026.
- Salary thresholds increased: The minimum salary for most new visas has risen to £41,700, with higher “going rates” set for many roles. Reduced thresholds are available only for specific new entrants or PhD roles.
- Care worker sponsorship closed: Overseas recruitment for most adult care roles is now blocked. Existing visa holders may remain, but no new CoS will be granted in these categories.
- Dependants restricted: Staff sponsored in sub-degree or TSL roles can no longer bring dependants to the UK on new visas. Only graduate-level hires retain this option.
- Transitional provisions: Any Certificates of Sponsorship issued before 22 July 2025 are processed under the old rules. Sponsors must fast-track urgent hires or risk falling under the stricter regime.
Impact:
Employers, EOR sponsors, and mobility providers must now reassess job roles, update salary offers, and review family and mobility policies for UK assignments. The bar for legal sponsorship is now materially higher, and compliance risk has increased across all categories.
Transitional Relief and Deadlines
Any Certificate of Sponsorship issued or application submitted before 22 July 2025 is assessed under the existing rules. Time-sensitive roles should be fast-tracked before the deadline to avoid the tighter regime.
The Temporary Shortage List expires on 31 December 2026 unless extended by the Migration Advisory Committee (MAC), and eligibility beyond that will depend on sector-specific workforce plans.
Saudi Arabia: New Skill-Based Work Permit System Now Active
From 1 July 2025, Saudi Arabia has launched a new skill-based classification for all expatriate work permits. Under the new framework, work permits are now categorised as high-skill, skilled, or basic, based on qualifications, experience, job function, and compensation.
- Mandatory Skills Classification
Every new and renewing work permit must be assigned a skill level according to the Saudi Standard Classification of Occupations (SSCO). Existing expat staff must be reclassified within the Qiwa system. - Integrated Compliance
The system is now fully linked to digital platforms (Qiwa, Mudad), with skills data cross-checked against official records and the Saudi Skills Taxonomy. - Workforce Planning Impact
The classification model ties directly to Saudization targets. Employers must ensure recruitment and workforce management align with the new tiers, as roles in the “basic” category will face greater scrutiny and pressure to localise. - Consequence of Non-Compliance
Incomplete or misaligned records may result in delayed or rejected permits. The authorities have flagged active monitoring and no transition period for the new requirements.
Employers operating in Saudi Arabia must review all expatriate job descriptions, contracts, and compensation bands to align with the new skill levels. Immediate reclassification in Qiwa is mandatory for existing staff. Workforce planning, recruitment pipelines, and localisation strategies will all need to adapt, particularly for roles at the lower skill tiers
United Arab Emirates: New Freelance Visas Temporarily Suspended
As of 5 July 2025, the UAE has halted all new freelance visa applications. The freeze applies across all emirates and free zones, affecting digital nomads, consultants, and self-employed professionals seeking to enter the country without an employment sponsor.
- Existing freelance visas remain valid and renewable. The suspension only impacts new applicants; current holders keep their status until renewal.
- Employers and project leads should expect limited access to short-term or independent talent until further notice.
- The pause signals a wider review of freelance pathways and flexible work permits. Updated eligibility criteria and revised procedures are expected in the coming months.
Freelancers planning to relocate will need to explore alternative routes or delay moves. Employers relying on agile, project-based talent in the UAE should reassess their talent plans and stay alert for new developments as the regulatory review continues.
Malaysia: New Pre-Approval System for Expatriate Hiring
As of July 2025, companies operating in Peninsular Malaysia must now obtain pre-approval from the Department of Labour and SOCSO before hiring expatriate staff under the Employment Pass or Professional Visit Pass schemes. All submissions are processed exclusively through the Xpats Gateway, now operating as a single digital platform for end-to-end applications and status updates.
- Centralised Pre-Approval
Employers must submit all required documentation and obtain official approval via Xpats Gateway before proceeding with expatriate or visiting expert applications. The process is designed for faster decisions and clearer compliance checks. - Strict Penalties for Non-Compliance
Any breach, such as falsified information, forged documents, or misuse of the application system, now results in a mandatory six-month “cooling-off” period, during which the company cannot submit new applications. Repeat or serious violations may trigger further sanctions. - Full Compliance Review
Companies placed under the cooling-off period will undergo a comprehensive compliance and governance audit before regaining eligibility to hire expatriates.
Employers must treat each immigration application as a compliance-critical event. Strong internal controls, accurate submissions, and robust documentation are essential to avoid disruptions in workforce planning. The Xpats Gateway’s new digital process streamlines legitimate applications, but increases the risk and consequences for missteps.
South Korea: New Barriers for Dependent Visa (F-3) Applications
South Korea has introduced new restrictions and documentation requirements for dependent (F-3) visas, affecting families of foreign work visa holders from July 2025.
- No More In-Country Applications
As of April 2025, family members can no longer apply for F-3 dependent visas after arrival in Korea, except in rare humanitarian cases. All dependent applications now require advance planning from outside the country. - Tighter Document and Financial Checks
Authorities have increased the documentation burden and strengthened financial capability proof requirements for the main visa holder. This means more paperwork, longer preparation, and extended processing timelines. - Filing Pathways Narrowed
Families must now either:- Apply for the F-3 visa together with the main applicant via a Visa Issuance Confirmation Number (VICN) before entry, or
- File through a South Korean diplomatic mission abroad after the main visa and residence card are granted.
Assignees bringing family to Korea now face more complex and time-consuming procedures. Employers and mobility managers should start dependent visa planning well in advance and be ready to collect detailed financial and supporting documents for all F-3 applications. Last-minute in-country switches are no longer an option.
Slovenia: Mandatory Long-Term Care Contributions Begin
Starting 1 July 2025, Slovenia has introduced a statutory long-term care (LTC) contribution, requiring both employers and employees to pay 1% of gross salary to fund care services for those in need due to age, illness, or disability.
- Who Pays
All employees and employers in Slovenia must each contribute 1% of gross pay; pensioners and the self-employed also pay a set rate. For self-employed individuals acting as both employer and employee, the total rate is 2%. - Payroll Impact
The LTC contribution is deducted automatically from monthly salaries, reducing net take-home pay and increasing the total employment cost for companies with Slovenian staff or assignees. - Scope
The scheme covers those insured under Slovenia’s mandatory health insurance, including local hires, international assignees, and certain family members. Institutional LTC costs will shift to insurance coverage from December 2025. - Compliance
Employers are responsible for calculating, withholding, and remitting both employer and employee shares through standard payroll systems. Errors may trigger social security or tax penalties.
Organisations with employees in Slovenia, sending or receiving international assignees should update cost projections and payroll systems to account for the new LTC contributions. The measure raises statutory employment costs and affects net pay from July 2025 onward.
Finland: Restructuring and Consultation Rules Eased for Employers
Effective July 2025, Finland has relaxed its rules on employee consultation and restructuring — a move aimed at reducing administrative burden for smaller and mid-sized employers undergoing organisational change.
- Threshold for Mandatory Consultations Raised:
Fewer companies are now subject to statutory consultation (co-determination) rules during workforce reductions and restructures. The new threshold exempts more small and medium employers from lengthy negotiation obligations. - Shorter Negotiation Periods:
The minimum required duration for employee consultations during organisational change has been cut by half, enabling employers to implement workforce transitions more quickly. - Practical Impact:
The reforms allow qualifying companies to proceed with restructures, layoffs, or work reallocations on a faster timeline, with fewer procedural steps.
HR and legal teams managing Finnish workforces should immediately review which entities and subsidiaries are now exempt from the old co-determination rules. Updated policies, notification templates, and planning timelines should be implemented to align with the new, streamlined process. While flexibility increases, employers must still ensure all remaining notice and communication obligations are met to avoid disputes or penalties.
On the Blog: Featured Articles in July 2025
Explore new insights on international hiring, workforce stability, and Global Employer of Record strategies from our latest blog articles:
- Global EOR Explained
A practical guide for employees, clarifying what EOR employment really means for contracts, rights, and long-term security when working across borders. - Global Employer of Record for Recruiters
A look at how recruiters use EOR to help clients fill roles in places where direct employment just isn’t the option, and what goes on behind the scenes. - Workforce Continuity as a Value Driver in M&A
For companies managing transitions or facing M&A: How Global EOR helps companies maintain team stability and retain key talent when entering new markets, restructuring, or navigating organisational change. - Employee Benefits Guide 2025
What’s new and expected in benefits packages for internationally mobile talent this year, and how employers are responding to shifting priorities.
These articles are grounded in practical scenarios and offer direct answers to the challenges employers, recruiters, and HR leaders face in today’s global market.
Closing Word
We know your time is valuable. That’s why each edition is designed to make your global compliance easier, spotlighting what’s new, what’s changing, and what you can act on right away. It’s our way of helping you cut through the complexity and lead with clarity.
Thanks for letting us be part of your journey. We’ll be back next month with more insights to keep your teams informed, agile, and ahead of the curve.
Stay informed, stay ahead!