In a significant labor reform, Saudi Arabia has officially abolished its decades-old Kafala system, a sponsorship framework that tied migrant workers’ residency and employment to individual employers.
This move, announced in June 2025, is set to impact approximately 13 million foreign workers, primarily from South and Southeast Asia, who have long faced restrictions on job mobility and limited labor protections.
Introduced in the 1950s, the Kafala system required migrant workers to have a local sponsor, or “kafeel,” who held significant control over their legal status.
Under this system, workers were unable to change employers, leave the country, or even file complaints without the sponsor’s consent. Critics have long described it as a form of modern-day slavery, citing frequent cases of exploitation and abuse.
The new labor reforms replace the Kafala system with a contractual employment model, granting workers greater autonomy.
Workers can now change jobs upon contract completion without requiring prior employer approval. They also have the right to exit, return, and travel permanently by electronically notifying their employer, eliminating the need for consent.
These changes align with Saudi Arabia’s Vision 2030, which aims to modernize the economy, attract foreign investment, and improve the kingdom’s human rights record by meeting international labor standards. The reforms are expected to enhance protections for workers, improve working conditions, and provide legal recourse against unfair treatment.
Among the affected migrant population are over 2.6 million Indian nationals, who have historically been among the most affected by the Kafala system’s restrictions. The reforms are expected to provide them with enhanced job mobility and legal protections, improving their welfare and overall working conditions in the kingdom.
Saudi Arabia joins Bahrain and the UAE in dismantling the Kafala system, signaling a broader shift in labor policies across the Gulf Cooperation Council countries. While Qatar and Oman still maintain versions of the system, the recent reforms in Saudi Arabia may encourage neighboring nations to reconsider their labor frameworks.
The abolition of the Kafala system marks a historic step toward improving the rights and freedoms of migrant workers in Saudi Arabia. While challenges remain, particularly in sectors like domestic work, the reforms represent a significant move toward aligning the kingdom’s labor practices with international standards and enhancing the dignity and autonomy of its migrant workforce.
