Deep Dive Analysis – United Kingdom: Visa Vignettes phased out for key routes: eVisas now standard

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On August 6, 2025 the German Federal Cabinet approved a new bill targeting undeclared work and illegal employment. The Financial Control of Undeclared Work (FKS) will have significantly broader powers and will introduce advanced risk analysis systems to identify non-compliance.

The bill must still pass through the Bundestag and Bundesrat in the coming weeks. Final adoption is expected by the end of 2025, with some provisions entering into force as early as January 2026. We strongly encourage companies to take a proactive approach in reviewing their internal processes and ensuring that their immigration, labor, and payroll practices are fully aligned. Vialto will continue to provide updates and guidance on corporate immigration strategy under the new government and new laws.

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On August 6, 2025, the German Federal Cabinet approved a comprehensive reform package to intensify the fight against undeclared work and illegal employment. The package modernizes enforcement to address increasingly organized forms of illegal activity. The Financial Control of Undeclared Work (FKS) will gain new investigative powers, including telecommunications surveillance in serious cases involving suspected invoice fraud or fictitious subcontractor chains. Such measures will only be permitted under strict conditions, typically requiring judicial authorization.

Authorities will also deploy artificial intelligence and automated data analytics to strengthen risk-based inspections and identify suspicious patterns. Certain industries—such as barbershops, nail salons, cosmetic services, and hairdressers—will face enhanced scrutiny, with employees required to present valid identification during inspections. Data retention rules will be tightened as well, with banks and insurers obligated to store records for up to ten years to support investigations into undeclared employment. While some small businesses will be temporarily exempt from certain rules, the broader direction is clear: compliance enforcement in Germany is becoming more aggressive, technology-driven, and far-reaching.

Impact for your business

• Severe penalties for violations: fines up to EUR 500,000, exclusion from public contracts and
  subsidies, bans on new work authorizations for up to five years, and liability for deportation
  costs.
  Higher compliance expectations: increased scrutiny of onboarding processes, employment
  documentation, and subcontractor arrangements.
• Risk of exposure during audits: labor inspections may uncover payroll inconsistencies or
  immigration compliance gaps.
• Cross-functional risk: fragmented approaches between HR, legal, payroll, and tax functions
  heighten vulnerability.
• Digital readiness required: time tracking, personnel data management, and recordkeeping
  systems must be modernized to keep pace with data-driven enforcement.

How we can help

For businesses employing foreign nationals, compliance is no longer just good practice—it is essential risk management. We strongly encourage companies to take a proactive approach in reviewing their internal processes and ensuring that their immigration, labor, and payroll practices are fully aligned.

Vialto will continue to provide updates and guidance on corporate immigration strategy under the new government and new laws.

In addition, we are available as your point of contact to clarify open questions and develop tailored solutions. Feel free to contact us to learn more about how we can support you in navigating skilled immigration effectively.