Saudi Arabia ends Kafala system, grants freedom to migrant workers

In a landmark move, Saudi Arabia has officially abolished its decades-old Kafala (sponsorship) system, ushering in historic labor reforms that grant greater freedom and protection to over 13 million migrant workers. Announced in June 2025 and effective as of this month, the decision marks a significant shift under the Kingdom’s Vision 2030 initiative, aimed at modernizing its economy and improving human rights standards.Derived from the Arabic word for 'sponsorship,' Kafala became synonymous with the power dynamic that governed migrant employment across the Gulf for generations. The system gave employers near-total authority over their workers, from approving job changes to deciding whether they could leave the country or seek legal help. According to the Saudi Press Agency (SPA), the new labor framework replaces Kafala with a contractual employment model, offering migrant workers unprecedented rights:

- Freedom to Change Jobs: Workers can now switch employers without needing prior approval.

- Travel Liberty: Exit visas are no longer required to leave the country.

- Legal Protections: Enhanced access to justice and safeguards against exploitation.

Introduced in the 1950s to manage the influx of cheap foreign labour that fuelled the Gulf’s oil boom, the Kafala model bound each migrant to a local sponsor, or Kafeel. This sponsor controlled the worker’s residency, legal status, and employment, effectively tying their livelihood and freedom to a single individual or company.However, the framework became a source of widespread abuse. Employers could seize workers’ passports, delay or deny wages, and restrict their movement. Without their sponsor’s permission, workers could not change jobs, return home, or approach the authorities in case of mistreatment. Human rights groups repeatedly described Kafala as a form of "modern-day slavery," arguing that it stripped migrants of basic freedoms and legal protection.

Global outcry against the Kafala system intensified in recent years. The International Labour Organization (ILO), along with several human rights NGOs, accused Gulf nations of perpetuating forced labour and human trafficking under the guise of sponsorship.The worst affected were domestic workers, particularly women, who often lived in isolation and faced limited legal protection. Reports from global rights groups documented cases of overwork, non-payment, and abuse.

The abolition is a key pillar of Crown Prince Mohammed bin Salman’s Vision 2030, a strategic plan to diversify the economy and improve the Kingdom’s global image. By attracting global talent and promoting fair labor practices, Saudi Arabia aims to boost economic participation and reduce dependency on oil.Under the new framework, Saudi Arabia will move to a contract-based employment system designed to give workers more independence and control over their lives. Migrant employees will now be able to change jobs without needing approval from their current employer. They will also be free to leave the country without requiring an exit visa or their sponsor’s consent, ending a restriction that trapped many in abusive or exploitative conditions.

Saudi Arabia, home to roughly 13.4 million migrant workers, nearly 42 percent of its total population, has long relied on foreign labour to sustain its domestic, construction, and agricultural sectors. Workers from India, Bangladesh, Nepal, and the Philippines formed the backbone of these industries, often enduring harsh working conditions and limited recourse.The kingdom’s decision to dismantle the system follows years of international scrutiny and echoes reforms undertaken by neighbouring Qatar, which overhauled its labour laws ahead of hosting the 2022 FIFA World Cup.