In 2025, Saudi Arabia marked a historic turning point by officially dismantling its 50-year-old Kafala system—a labor sponsorship framework that had long governed the lives of millions of migrant workers in the Kingdom. This new Kafala System reform is part of Crown Prince Mohammed bin Salman’s Vision 2030 plan, aimed at modernizing the Saudi economy and society. It promises to reshape the labor landscape, especially for the approximately 13 million migrant workers who constitute a significant part of the Saudi workforce.
What Is the Kafala System?
The Kafala system, derived from the Arabic word for “sponsorship,” originated around the 1950s in Gulf countries, including Saudi Arabia. It was designed to regulate the flow and management of migrant laborers who were essential to the region’s rapid economic growth, primarily fueled by oil wealth. Under this system, a migrant worker’s legal status, residency, and employment were tied to a local sponsor, called a kafeel, who was responsible for the worker’s visa and legal presence in the country.
While intended as an administrative framework to manage foreign labor, the system gave employers near-total control over their workers. Workers needed their sponsor’s approval to change jobs, leave the country, or even seek legal recourse. This created widespread opportunities for exploitation, including passport confiscation, delayed wage payments, restricted mobility, and abusive work conditions. Consequently, the Kafala system has been heavily criticized internationally and accused of functioning as a form of modern-day slavery.
The Previous Kafala System in Saudi Arabia
For decades, Saudi Arabia implemented the Kafala system as a core part of its labor market. Employers, acting as sponsors, held extensive authority over migrant workers, who made up a large percentage of the workforce. This hierarchical structure subjected many workers to dependency, vulnerability, and lack of freedom, particularly in lower-skilled and domestic sectors.
International human rights organizations and labor advocacy groups continuously called on Saudi Arabia to reform or abolish the system, citing its negative effects on workers’ rights and dignity. Within the Kingdom, there were also growing calls for modernization aligned with broader economic diversification goals under Vision 2030.
The New Kafala System in Saudi Arabia
In June 2025, Saudi Arabia officially ended its traditional Kafala sponsorship model, replacing it with a contract-based system designed to empower workers and enhance their legal protections. The new framework decouples workers’ residency and employment status from individual sponsors, allowing greater freedom and flexibility.
Key features of the new system include:
- The ability for migrant workers to change jobs without the consent of their current employer.
- Freedom to exit the country without requiring an exit visa or sponsor permission.
- Expanded access to labor courts and complaint mechanisms for workers to report issues.
- A contractual relationship based on explicit terms between employers and employees, promoting transparency and fairness.
This reform aims to align Saudi labor laws with international standards and improve the Kingdom’s attractiveness for foreign talents and investors.
How Will This Affect Migrant Workers?
The abolition of the Kafala system is expected to significantly improve the lives of millions of migrant workers in Saudi Arabia. Benefits include:
- Enhanced job mobility: workers can switch employers freely, reducing their dependency on a single sponsor and mitigating abusive employment relationships.
- Greater personal freedom: the ability to leave the country at will without administrative barriers.
- Stronger legal protections: improved access to justice and workers’ rights enforcement.
- Better work conditions: As employers are incentivized to comply with labor laws under scrutiny.
This shift is seen as a landmark step in improving migrant welfare and labor rights, potentially transforming Saudi Arabia into a more worker-friendly destination.
Requirements for Terminating the Kafala System
Transitioning away from the Kafala system required substantial legislative and procedural changes by the Saudi government, including:
- Removing employer control over visa issuance and exit permits.
- Introducing standardized labor contracts regulated by the Ministry of Human Resources and Social Development.
- Establishing labor dispute resolution channels for workers to safely report grievances.
- Public awareness campaigns to inform workers and employers of their new rights and responsibilities.
- Enforcing compliance through penalties for employers violating the new labor regulations.
These steps ensured the termination of the Kafala system would be effective and sustainable.
Professions Exempted from the New Kafala System
Saudi Arabia has progressively exempted certain professional categories from the traditional Kafala controls before full abolition. Over 20 professions have been identified where workers already enjoyed greater freedoms, including executive directors, sales directors, accountants, engineers (civil, electrical, mechanical), medical professionals, and administrative managers.
Workers in these sectors no longer required sponsorship-based permissions to change jobs or travel, as the government introduced more contractual recruitment frameworks for them earlier on. This phased approach helped ease transition challenges and set precedents for the broader labor market reform.
International Calls for Reform
The Kafala system faced widespread international condemnation for decades. Global human rights organizations, labor unions, and foreign governments called for its reform or abolition due to its notorious record of enabling worker exploitation. Migrant advocacy groups highlighted cases of passport confiscation, forced labor, and restricted freedom under Kafala.
Countries like Qatar and Bahrain implemented limited reforms earlier, and now Saudi Arabia’s comprehensive abolition marks a watershed moment. International communities broadly welcomed the change as a positive step toward ending abusive sponsorship practices in the Gulf region. Observers remain attentive to the practical implementation and enforcement of the new system to ensure real improvements for migrant workers.
Conclusion
This comprehensive overhaul of the Kafala system in Saudi Arabia, 50 years after its inception, holds the promise to fundamentally change labor relations, enhance workers’ dignity, and foster a more equitable society. It signifies an important stride in aligning Saudi Arabia’s labor policies with global labor rights standards.
FAQs
- What was the Kafala system?
It was a sponsorship system tying migrant workers’ residency and jobs to a local employer, limiting their freedom to change jobs or leave Saudi Arabia.
- What changes did Saudi Arabia make in 2025?
Saudi Arabia replaced the old Kafala system with a contract-based model allowing workers to change jobs and leave the country without employer permission.
3. How many workers are affected by this reform?
Around 13 million migrant workers in Saudi Arabia, mostly from South and Southeast Asia, benefit from the new rules.
- Does the new system apply to all workers?
The reforms mainly apply to private-sector employees; some sectors like domestic workers may still have separate regulations.
- Why was the Kafala system criticized internationally?
It was widely seen as enabling worker exploitation and restricting basic freedoms, likened to modern-day slavery by rights groups.
