Saudi Arabia has announced the official abolition of the Kafala sponsorship system, a decades-old framework that tightly controlled the employment and movement of migrant workers. Effective June 2025, this reform frees millions of foreign labourers, including 2.6 million Indians, from the requirement of employer permission to change jobs, leave the country, or access legal protection. The shift, part of wider modernization efforts under Saudi Vision 2030, is expected to improve worker rights, reduce exploitation, and increase job mobility for migrants, although advocates emphasize continued vigilance to ensure proper enforcement.
Since the implementation of the New Labor Law, issued by Royal Decree No. M/51 dated 7 August 2021 has gradually paved away for the full abolition of the Kafala system by June 2025. Specifically, Article 110 of the New Saudi Labor Law explicitly abolished the requirement for an employee to obtain the employer’s consent (sponsor’s approval) to change jobs before the expiry of the contract or without the employer’s permission. This provision ended the employer-sponsored “exit permit” and “no objection certificate” requirements central to the Kafala system.
What did the Kafala System entail?
The Kafala system, derived from the Arabic word kafala, meaning “sponsorship,” was a legal and administrative framework that defined the relationship between migrant workers and their employers (called kafeel) across many Gulf countries, including Saudi Arabia. Introduced in the 1950s during the oil boom, it was originally meant to regulate the influx of foreign labour that powered the region’s rapid development. Under Kafala, a migrant’s visa, residency, and employment status were tied entirely to their sponsor, giving employers almost total control over workers. This included the right to approve or deny job changes, renew residence permits, and grant permission to leave the country. In practice, sponsors often confiscated workers’ passports, delayed their salaries, and restricted their movement, conditions that human rights groups condemned as facilitating “modern-day slavery.”
Although it was initially designed to ensure orderly labour migration and protect local employment, the Kafala system devolved into an exploitative mechanism that left many workers from India, Bangladesh, Pakistan, Nepal, and the Philippines vulnerable to serious abuse. Low-wage and domestic workers were especially at risk, often facing long hours, isolation, and little legal recourse. Because workers’ legal status was linked to their employers, reporting mistreatment could lead to deportation or blacklisting. Over time, global attention, including from the United Nations and the International Labour Organization (ILO), exposed these conditions, prompting reforms. The eventual abolition of Kafala in Saudi Arabia in 2025 marked a historic shift toward greater labour mobility and protection for millions of migrant workers in the Gulf region.
Why was the Kafaala System considered to be abusive?
The Kafala system was widely considered abusive because it gave employers near-total control over the lives of migrant workers, creating a deeply unequal and exploitative power dynamic. Under this system, workers’ legal status, residence permits, and even their ability to leave the country were all tied to their local sponsor, known as the kafeel. Employers routinely seized employees’ passports to prevent them from escaping or changing jobs and often withheld wages or delayed payments to maintain dependency. The sponsors could deny permission for workers to leave the country or switch employers, effectively trapping them in exploitative employment conditions. In many cases, workers who tried to flee or report abuse risked arrest, deportation, or blacklisting. Such conditions left them vulnerable to forced labour and human trafficking, prompting international organizations like the International Labour Organization (ILO) and Human Rights Watch to describe the system as “modern-day slavery.”
The abuses were especially severe among low-wage labourers and domestic workers, many of whom came from India, Bangladesh, Nepal, and the Philippines. Domestic workers, often women faced isolation, unpaid work, and physical or sexual abuse with little recourse to justice, as leaving an abusive employer could immediately render them undocumented. Reports documented British, South Asian, and African migrants enduring brutal working hours, starvation, or confinement. Because they could not approach authorities without sponsor approval, even legal protection mechanisms were inaccessible. The inherent imbalance built into the Kafala framework institutionalized exploitation, allowing employers to act as both benefactors and enforcers, blurring legal accountability. This combination of absolute employer control, lack of state oversight, and absence of worker rights turned Kafala into one of the most criticized labour systems in the modern world, prompting sustained calls for its abolition by rights groups and foreign governments alike.
How reliant is Saudi Arabia on foreign labour?
Saudi Arabia is highly dependent on foreign labour, with expatriates constituting the majority of its workforce, especially in key sectors driving the kingdom’s economy. As of 2025, approximately 70% or more of Saudi Arabia’s total workforce is comprised of foreign nationals, numbering over 13 million migrant workers across various industries. These foreign workers are particularly dominant in sectors such as construction, domestic work, hospitality, healthcare, retail, and the oil and gas industry fields, essential to Saudi Arabia’s economic infrastructure and development projects under its Vision 2030 plan.
The kingdom’s domestic workforce, largely made up of Saudi nationals, represents a smaller portion of the total labour pool due to skills mismatches, demographic factors, and socio-economic choices. To build its ambitious infrastructure projects, diversify its economy beyond oil, and support the rapidly expanding urban centers and service sectors, Saudi Arabia has relied extensively on immigrants from India, Pakistan, Bangladesh, the Philippines, Egypt, and other countries. The large expatriate labour presence also fills roles that Saudi citizens often avoid, either due to working conditions or wage levels. This foreign labour dependency has been a vital factor in sustaining the kingdom’s growth, urbanization, and global competitiveness, but it also poses socio-political challenges related to integration, labour rights, and economic reforms.
What made Saudi Arabia remove the system now?
Saudi Arabia abolished the Kafala system as part of a broader push to modernize its economy and society under its Vision 2030 initiative, which aims to diversify the economy beyond oil dependence and improve its global standing. The Kafala system, long criticized for enabling exploitation and human rights abuses against migrant workers, had become a barrier to attracting and retaining skilled foreign labour crucial for the kingdom’s ambitious development projects. International pressure from human rights organizations, foreign governments, and global events such as the 2022 FIFA World Cup in neighbouring Qatar highlighted the urgent need to reform labour practices. By ending the Kafala system, Saudi Arabia intends to create a more transparent, humane, and competitive labour market that aligns with international labour standards and enhances its reputation worldwide.
Additionally, the government recognized that the Kafala system’s restrictive controls hampered labour market flexibility and economic efficiency. Under the old system, workers’ dependency on sponsors limited their ability to change jobs, negotiate better wages, or seek legal protection, resulting in widespread dissatisfaction, underutilization of skills, and social tensions. The abolition fosters greater labour mobility and empowerment, allowing workers to operate with more freedom and dignity. This reform also supports domestic economic goals by encouraging Saudization, integrating more Saudi nationals into the workforce while balancing continued demand for foreign expertise. Ultimately, abolishing Kafala is a strategic move to enhance worker welfare, attract diverse talent, and lay a foundation for sustainable economic growth.
What changes do the migrant workers have to face now?
With the abolition of the Kafala system in Saudi Arabia, migrant workers will witness profound changes that enhance their autonomy, rights, and protections. Most notably, workers will gain the freedom to change jobs without needing approval from their employers or sponsors. They will also be able to exit the country without requiring an exit visa from their sponsor, a permission that was previously tightly controlled and often withheld. This newfound ability to switch employers and leave the country at will represents a fundamental shift from a system that restricted movement and left workers vulnerable to exploitation. Enhanced legal protections will also be introduced, with formalized and digitally registered labour contracts that reduce the chance of arbitrary penalties or abuse. Workers will have more accessible avenues to report grievances and seek dispute resolution directly through government mechanisms, enabling better enforcement of their rights.
Beyond legal reforms, there will be improvements in the broader living and working conditions for migrants. The Saudi government plans to mandate minimum standards for accommodation, healthcare access, and wages to safeguard worker welfare. Vulnerable groups, such as domestic workers, will benefit from specific protections designed to prevent abuse and exploitation. These reforms align with Saudi Arabia’s Vision 2030 goals of modernizing the labour market and improving its international standing as a destination for foreign workers. While the dismantling of the Kafala system marks a significant milestone, the true impact will depend on effective enforcement and cultural changes among employers to ensure migrant workers enjoy their expanded freedoms and protections in practice. Indian migrant workers, who form a substantial portion of the expatriate population, stand to gain increased dignity, job opportunities, and safety as a result of these comprehensive labour reforms.
What will be the impact of the change on Indian workers?
The abolition of the Kafala system in Saudi Arabia marks a significant improvement in the lives of Indian migrant workers, who constitute one of the largest expatriate communities in the kingdom. Indian workers, many employed in sectors such as construction, domestic services, hospitality, and healthcare, will gain unprecedented freedoms and protections. They will no longer be tied to a single employer for residency and work permits, allowing them to change jobs without depending on sponsor consent—a critical change for those facing exploitative conditions. The removal of the exit visa requirement grants them the ability to leave the country without employer approval, facilitating safer repatriation and greater personal autonomy. Access to legal recourse and formalized grievance mechanisms is expected to empower Indian workers to contest abuses and enforce their rights more effectively, addressing longstanding challenges related to wage theft, poor working conditions, and abuse.
Beyond these legal and procedural improvements, the reforms are set to positively affect the socio-economic well-being of Indian workers. With enhanced workplace protections and mandates for better living conditions, including housing and healthcare, migrant workers can anticipate improved quality of life. This evolution also opens avenues for greater labour market participation and upward mobility, as workers can seek employment aligned with their skills and aspirations instead of being stuck in precarious or low-wage roles. For India, the reforms carry broader implications, potentially increasing remittance flows and reducing the need for policy interventions related to worker distress abroad. Indian diplomatic missions are actively preparing to guide and assist workers through the transition, ensuring they are informed about their new rights and support systems. Overall, the Kafala system’s end is expected to usher in a new era of dignity, safety, and opportunity for Indian migrants in Saudi Arabia.
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