May 2025 is the month when cross-border employment systems get stress-tested.
This month’s newsletter tracks a visible shift across multiple jurisdictions: regulatory tightening, rollback of earlier flexibilities, and renewed scrutiny on how employers operate across borders.
Governments are reasserting control over workforce flows, and compliance is becoming less negotiable.
As always, the focus is practical. If you’re involved in cross-border hiring, immigration planning, or employment compliance, these developments will impact how your workforces are managed in the months ahead.
🇨🇦 Canada: Temporary EI Rules Eased Amid Tariff Fallout
In response to foreign tariff impacts, the Canadian government has introduced time-limited amendments to its Employment Insurance (EI) framework, aimed at improving access and easing compliance for employers managing workforce reductions.
Key measures include:
- Boosted regional unemployment rates (6 April – 12 July 2025): EI eligibility thresholds have been temporarily lowered by inflating regional jobless rates, reducing required insurable hours and extending benefit duration.
- Severance repayment rules suspended (30 March – 11 October 2025): Lump-sum separation payments made during this period will not trigger EI repayment obligations for employees who claim benefits.
- Waiting period waiver introduced: Service Canada may waive the standard one-week EI waiting period for claims filed between 30 March and 11 October 2025, unless serving the wait is financially advantageous to the employee.
Employers managing terminations during this period should review how these changes affect severance planning, benefit coordination, and reporting.
🇪🇺 EU: Staged Border System Rollout to Impact Non-EU Business Travel
A new border control mechanism for the Schengen area — the Entry/Exit System (EES) — will be introduced in phases over six months, rather than through a single activation date. This approach is intended to ease pressure on national IT systems and reduce disruption. The timeline was provisionally agreed on 19 May 2025 and awaits formal adoption.
What the EES Will Change:
The system replaces manual passport stamping with digital tracking of border crossings by non-EU travellers entering for short stays. It will record identity data, travel dates, and length of stay, creating a unified database across participating Schengen states.
Phased Implementation Plan:
- Month 1: Minimum 10% of crossings must use EES
- Months 1–2: Biometric checks optional
- Month 3+: 35% of crossings must operate biometric functionality
- By Month 6: Full operational coverage expected
Temporary manual processes will continue during the transition, and national authorities may suspend digital processing temporarily if delays are excessive.
Implications for Employers:
Non-EU nationals travelling for work, especially visa-exempt business visitors, will face new scrutiny on cumulative time spent in the Schengen area. Employers should update travel tracking processes and ensure employees understand the risks of inadvertent overstays, particularly where business and personal travel overlap.
Countries applying the EES include most EU and Schengen states, excluding Ireland and Cyprus, which will continue manual procedures.
🇬🇧 UK Immigration System Overhaul: Significant Shifts Ahead
The UK Government’s May 2025 “Restoring control over the immigration system” White Paper outlines a complete reset of immigration strategy, not just fine-tuning rules, but reshaping who gets to come, stay, settle, and sponsor.
While framed as a response to political and economic pressures, these proposals will have real consequences for employers reliant on international talent.
Here’s what’s changing and what matters:
- Settlement is no longer a five-year path
Most routes will now require 10 years of continuous presence before applicants qualify for Indefinite Leave to Remain. Fast-track categories like Global Talent survive, but the idea that standard work visas lead to permanent status within five years is being dismantled. Language thresholds are rising across every stage, and progression is now enforced. - Skilled Worker eligibility will narrow dramatically
Mid-level roles (RQF 3–5) are being removed from the core Skilled Worker route. This reverses a post-Brexit opening and will make roughly 180 roles ineligible under new criteria. Affected sectors should prepare now for changed eligibility and higher salary requirements. - Discounted salary thresholds are being phased out
The Shortage Occupation List, replaced earlier this year by the Immigration Salary List, will be replaced again. The new Temporary Shortage List will be tightly controlled, short-term, and inaccessible for many. No dependants. No settlement. Limited scope. - Social care workers to be removed from visa eligibility
Citing abuse and exploitation in the system, the Government will close the route for new overseas care workers. Transitional provisions apply through 2028, but this is a hard stop for new hires. - Sponsor obligations: higher costs, higher scrutiny
Sponsors will face a 32% increase in the Immigration Skills Charge, tighter enrolment and completion requirements (for educational sponsors), and language rules extending to adult dependants. Visa audits and digital tracking are also expanding. - Graduate visas shortened, international education taxed
The Graduate visa will drop from 2 years to 18 months. The Government also proposes a 6% tax on income from international students, payable by universities — a move likely to reshape student recruitment models and compliance systems. - Selective openness for high-skilled, high-investment routes
While most channels are tightening, routes like Global Talent, Innovator Founder, and HPI may expand. The Government wants to attract capital and innovation, but it’s closing the door on generalist economic migration.
What this means in practice: if you hire into the UK, manage talent pipelines, or run workforce planning involving settlement or family relocation, this is no small adjustment. The White Paper shifts the balance firmly toward shorter stays, stricter controls, and higher sponsor responsibility, while preserving room for elite and high-value categories.
Acumen supports cross-border hiring where immigration, compliance, and risk need to be mitigated.
The History of Global Employment
The Real History of Global EOR and Why It Matters Now
Today’s Global EOR market didn’t come from a trend. It came from pressure.
Legal pressure. Tax pressure. Immigration pressure. And the operational chaos of global expansion without infrastructure.
As companies pushed into new markets, they faced hard limits: entity requirements, misclassification risk, immigration roadblocks, and unclear liability. Traditional employment structures couldn’t keep up.
Our latest article maps the real history and evolution — from domestic outsourcing to co-employment, to local employer stand-ins, to the platform wave, and finally to the operational layer Global Employer of Record has become today.
Highlights include:
- Why early models like PEO couldn’t cross borders and how that shaped what came next.
- The role of post-2010 distributed teams in forcing multi-country delivery.
- How platform-led solutions reshaped expectations but often failed on complexity.
- What COVID actually changed and why it wasn’t just about remote work.
- The current state of the market: mature buyers, fragmented offerings, and rising demand for risk ownership and lifecycle support.
This isn’t a piece about trends. It’s about structure. And if you’re involved in hiring across borders, it helps you understand where the model came from and what to demand now.
Because when it comes to Global EOR, onboarding is not the product. Employment is.
Read the full article here.
When Tech-First Stops Being Enough
There’s been a clear shift in recent months and it’s not just about isolated Global EOR failures. The volume of public commentary, the number of experienced professionals raising concerns, and the visibility of breakdowns around onboarding, immigration, and compliance all point in one direction: the market is becoming more aware.
The sales pitch pushed by platform-first providers — ‘hire anywhere for $200/month, no friction’ — is being tested against the realities of global employment. And for many companies, it’s not holding up. Technology alone may assist with onboarding, but it doesn’t carry legal liability. It doesn’t manage termination risk, resolve visa blocks, or ensure local compliance.
What we’re seeing now is a rebalancing. Companies are asking more serious questions, not just about where they can hire, but how employment is structured, who bears the risk, and what happens when things go wrong.
The focus is shifting back to long-term value: reliable delivery, legal clarity, and compliant approaches that serve both the employer and the employee. It’s no longer about ticking the onboarding box. It’s about building a workforce model that stands up to scrutiny and global scale.”
Stuart Creasey, Regional Manager at Acumen International
🇵🇱 Poland Overhauls Foreign Employment Rules: What’s Changing from 1 June
New legislation coming into force on 1 June 2025 will significantly reshape how employers in Poland hire and manage foreign nationals. While some processes remain familiar, the removal of the labour market test and a series of new employer obligations mark a shift toward stricter reporting and real-time oversight.
Here’s what employers need to know:
1. Labour Market Test Scrapped
Previously, employers had to confirm via local labour office documentation that no local candidate was available before applying for a work permit. That step is now gone. However, regional authorities (starosts) may introduce exclusion lists of roles ineligible for permits. These lists have yet to be published, but could introduce new unpredictability for role-based hiring.
2. Mandatory Reporting Obligations Expand
Employers will now be responsible for notifying authorities, mostly via Poland’s praca.gov.pl portal of a wide range of events, including:
- Contract submission within 7 days of employment starting (or prior, for statements)
- Employee absences, early terminations, or delays in taking up work
- Changes in job title, work hours, company location, or contract type
- Loss of employment, which must be reported within 15 days
Failure to comply risks fines of up to PLN 50,000 — a significant increase over previous penalty limits.
3. Temporary Role Adjustments Permitted
Employers may temporarily assign foreign workers to roles different from those listed in their permit for up to 30 days per calendar year, as long as the core terms are respected and advance notification is submitted.
4. Transitional Uncertainty Remains
The law will apply to existing permits and declarations, not just new ones. But as of now, authorities have not issued clear implementation guidance, creating some short-term uncertainty around enforcement.
If you hire foreign workers in Poland directly or through EOR, this reform signals increased scrutiny of how foreign employment is initiated, monitored, and reported. Systems will need to be in place for real-time compliance and documentation.
🇮🇹 Italy: Labour Law Referendums Signal Potential Repeal of Jobs Act Provisions
Italy will hold a series of national referendums on 8–9 June 2025 that could result in the partial repeal of the 2015 Jobs Act, a major reform package that reshaped employment protections and dismissal procedures.
The referendums target two core elements:
- Employment contracts with increasing protections (contratto a tutele crescenti)
Introduced as a key feature of the Jobs Act, these contracts reduced protections for new hires by delaying access to full reinstatement rights and compensation. If repealed, employers may face higher reinstatement risk earlier in the employment lifecycle, particularly in termination cases. - Regulations on unlawful dismissal
The reform narrowed the circumstances under which reinstatement was mandatory and replaced many with capped compensation instead. A reversal could restore broader reinstatement rights, increasing exposure for employers managing workforce exits.
🇵🇭 Philippines: Digital Nomad Visa Programme Officially Launched
The Philippines has formally introduced a Digital Nomad Visa (DNV) under Executive Order No. 861, authorising non-immigrant foreign nationals to reside temporarily in the country while working remotely for clients or employers located abroad.
The new visa category reflects the government’s focus on digital transformation and aims to attract location-independent workers while safeguarding local labour protections.
Eligibility Criteria
To qualify, applicants must:
- Be 18 years or older
- Demonstrate proof of remote work using digital tools
- Earn income from non-Philippine sources
- Hold health insurance valid for the duration of stay
- Present a clean criminal record
- Be a citizen of a country that both:
- Offers digital nomad visas to Filipinos, and
- Hosts a Philippine Foreign Service Post
Applicants must not engage in local employment or pose a security risk.
Visa Terms
The DNV permits a one-year stay, renewable once, with multiple entry rights. Applicants from countries without a Philippine diplomatic post may apply through a neighbouring state.
Next Steps
The Departments of Foreign Affairs, Justice, Tourism, Immigration, and Internal Revenue are expected to issue implementation guidelines within 30 days of the Executive Order’s effective date.
Employer Note
Companies with globally mobile talent should assess whether employees using the Philippines as a remote base meet the visa’s source-of-income and compliance conditions. Misuse of tourist or short-term visas for extended remote work could expose individuals to regulatory breaches.
The Employer Risk Behind Digital Nomad Visas
Acumen International examines the compliance blind spots these schemes can create.
While over 50 countries now offer digital nomad visas to attract remote workers, most were designed around individual residency, not employment legality. Employers often assume these visas provide full coverage, but in reality, they offer no structure for payroll, benefits, labour law, or tax obligations.
The risks are material. If an employee is working abroad under a digital nomad visa, the employer may still be exposed to:
- Local labour law claims (working hours, leave, termination rules)
- Payroll tax and social contributions
- Misclassification penalties
- Permanent establishment (PE) exposure if the work is strategic or revenue-linked
The article argues that approving remote work abroad must go beyond checking visa validity. A compliant structure, often via a Global Employer of Record (EOR), may be required to align legal presence with employment legality.
Read the full article on how global employers can close the gap between location freedom and legal responsibility here.
UK–India Agreement to Prevent Double Social Security Contributions
On 6 May 2025, the UK and India finalised a Double Contribution Convention (DCC) to eliminate the issue of duplicate social security payments for employees on temporary international assignments. The agreement is set to come into effect alongside the broader UK–India Free Trade Agreement, likely by mid-2026.
What the Agreement Covers
The DCC ensures that when a worker is assigned from the UK to India or vice versa for up to three years, social security contributions will only be required in the worker’s home country. This arrangement benefits both employees and employers, removing the burden of dual contributions, being a longstanding issue in international mobility.
The UK and India share strong trade and investment ties, particularly in the IT sector. Each year, a significant number of Indian professionals are assigned to UK-based roles, and India ranks as the UK’s second-largest source of foreign direct investment. For companies managing frequent cross-border assignments between the two countries, the DCC brings clarity, cost savings, and compliance simplification.
What We Still Don’t Know
While a summary has been released, the full DCC text is not yet available. Key questions remain:
- Will coverage apply to all workers subject to either country’s social security system, or only to nationals?
- Will the agreement allow assignments longer than three years under special arrangements?
- Will it offer any mechanism to combine contribution periods across both countries (totalisation)?
- What provisions, if any, will apply to workers already on assignment before the DCC takes effect?
Acumen International will continue to monitor developments and provide further analysis once the full terms are published. If your organisation is managing assignments between India and the UK and needs strategic support with compliance or workforce planning, our team is here to help.
🇺🇸 United States: Major Tax Reform Package Clears the House
In late May, the U.S. House of Representatives passed a sweeping $4 trillion tax package, introducing a range of measures that could shape employer-sponsored benefits and personal tax planning over the coming decade. While Senate approval is still pending, the proposed legislation reflects a significant shift in fiscal priorities and may affect both U.S.-based employees and globally mobile staff with U.S. tax obligations.
Key provisions include:
- SALT Deduction Cap Raised
The cap on state and local tax (SALT) deductions would increase to $40,000, a major change for higher earners in high-tax U.S. states. This could alter net compensation calculations and may prompt reassessments of employer gross-up policies or relocation incentives. - Expanded Health Savings Accounts (HSAs)
The reform package broadens eligibility and contribution limits for Health Savings Accounts, especially benefiting older workers. For employers, this may influence benefits design and healthcare cost-sharing strategies in the coming years.
If you’re managing U.S.-based staff or globally mobile employees with U.S. tax residency changes to deduction caps and benefit-linked tax shelters can materially affect total reward strategy, relocation planning, and post-tax compensation outcomes. These aren’t headline issues in global mobility, but they’re the details that can create friction if ignored.
That’s It for May 2025
If this month’s updates share one theme, it’s this: assumptions about global workforce mobility, compliance, and employment are being challenged. What comes next won’t be uniform, but it will demand better oversight and sharper decisions from employers operating across borders.
We’ll be back next month with further updates. In the meantime, if any of these changes touch your hiring plans, internal policies, or active projects, we’re here to support.