In a historic step towards labor reform, Saudi Arabia has officially abolished the Kafala system, a labor sponsorship framework that controlled millions of migrant workers for over five decades. This long-standing system, introduced in the 1950s, granted employers sweeping power over the residency and employment status of migrant workers, primarily from South and Southeast Asia. The abolition, announced in June 2025 and implemented this year, fundamentally reshapes the labor landscape for approximately 13 million foreign workers, granting them greater freedom, legal rights, and improved working conditions.

Origins and Mechanics of the Kafala System

The Kafala system—Arabic for “sponsorship”—was initially designed to regulate foreign labor forces in Gulf Cooperation Council (GCC) countries, including Saudi Arabia. Under this framework, a migrant worker’s legal residency and employment rights were tied exclusively to a local sponsor or employer (kafeel). This mechanism was intended to delegate state administrative responsibilities to private individuals or companies, thereby simplifying visa and residency management.

However, over time, the system morphed into a structure riddled with profound power imbalances. Employers wielded absolute control, effectively preventing workers from changing jobs, leaving the country, or seeking legal resources without explicit consent. Such conditions often led to exploitation, abuse, and denial of fundamental rights. Human rights organizations widely criticized the system as enabling forced labor or conditions akin to modern-day slavery.

Key Changes in the Reform

Saudi Arabia’s recent reform replaces the Kafala system with a contractual employment model, aligned with modern labor standards. The government announced that migrant workers now have the right to change employers without prior approval, leave the country without an exit visa, and access legal protections formerly unavailable under Kafala.

This reform is a strategic part of Saudi Arabia’s Vision 2030 initiative, which aims to modernize the economy while improving the welfare of foreign workers. According to the Saudi Press Agency, employment contracts will be managed via the digital Qiwa platform, enhancing transparency and worker autonomy.

The reform also establishes specific eligibility for workers to benefit from new rights. These include private sector employees under documented contracts, workers with at least one year of service, those with clean legal records, and workers facing contract violations such as unpaid wages or job misrepresentation. Workers must also secure verified offers from compliant companies to switch jobs, ensuring a regulated and fair labor market.

Statements from Stakeholders

The Saudi government framed the reform as a fundamental modernization step. 

“The Saudi government said it was seeking to improve and increase the efficiency of the work environment,” 

reflecting its commitment to labor market flexibility and enhanced worker protections.

Human rights organizations cautiously welcomed these changes. Sharan Burrow, General Secretary of the International Trade Union Confederation (ITUC), remarked, 

“The agreements represented a breakthrough to end Kafala, principally because the government has said employers will no longer have the right to refuse visas for workers to leave the country.” 

However, she emphasized that this reform does not yet address the core restriction preventing workers from freely changing jobs, signaling that further negotiations remain necessary.

Similarly, experts like Nicholas McGeehan, a migrant workers’ rights specialist, urged caution: 

“All we have today are promises, and promises have been broken before. I feel we need to put expressions of optimism on hold until we see full details, changes in the law where necessary, and a time frame for promised reforms to be implemented.”

The International Labour Organization (ILO) supported the move, with senior migration specialist Azfar Khan stating the Kafala system is “not compatible with modern labor practices and should be abolished”, underscoring the reform’s alignment with international labor standards.

Impact on Migrant Workers and Labor Market

The reform affects about 13 million migrant workers who have historically faced severe restrictions under the Kafala system. Many have experienced limited job mobility, withheld wages, abuse, and exploitation without legal recourse. By dismantling these constraints, Saudi Arabia promises to significantly improve the working and living conditions of a vast labor force crucial to its economy.

The reform is expected to create a fairer labor market, attract skilled global talent, and support Saudi Arabia’s Saudization policy by balancing opportunities between expatriates and nationals. The flexibility now granted to workers should also boost workforce morale and productivity.

However, successful implementation is vital. Stakeholders emphasize robust monitoring mechanisms to ensure that these legal changes translate into tangible improvements at the ground level, as past promises have sometimes fallen short.

Economic and Social Implications

Besides improving human rights protections, the Kafala system’s abolition marks an economic turning point. By aligning Saudi labor laws with international standards, the Kingdom seeks to enhance its competitiveness as a destination for global talent and investment under Vision 2030.

Socially, the reform may improve Saudi Arabia’s international reputation on labor rights and migrant welfare—a subject of global scrutiny amid the Gulf’s economic boom and infrastructure investment.

More broadly, the reform challenges entrenched labor norms in the Gulf region, potentially influencing neighboring countries that continue to rely on similar sponsorship systems.

Saudi Arabia’s abolition of the Kafala system after 50 years represents a historic labor reform with profound implications. Grounded in Vision 2030 goals, it ushers migrant workers into a framework of greater freedom, protection, and dignity, while promising economic modernization and global integration.

While the government emphasizes improved efficiency and worker rights, international experts and labor groups urge vigilance to ensure meaningful implementation beyond mere promises. If realized fully, this reform could set a powerful precedent in migrant labor rights in the Gulf region and beyond.