Saudi Arabia Officially Abolishes Decades-Old Kafala System, Granting New Freedoms to Millions of Migrant Workers

Historic Labor Reform Implemented

In a significant development, Saudi Arabia has officially abolished its decades-old Kafala labor sponsorship system. The reform, announced in June 2025 and implemented this year, marks a historic shift in the rights and freedoms of millions of migrant workers within the Kingdom. For over 50 years, the Kafala system tied foreign workers' residency and employment status directly to a single employer, known as a 'kafeel', a practice widely criticized by human rights organizations as enabling exploitation and abuse.

This groundbreaking change is expected to impact approximately 13 million foreign workers, predominantly from countries in South and Southeast Asia, including India, Bangladesh, Nepal, and the Philippines. The abolition is a key component of Crown Prince Mohammed bin Salman's Vision 2030, an ambitious plan to diversify the Saudi economy, attract foreign investment, and modernize the country's global image.

Key Changes and Enhanced Worker Rights

The new framework replaces the restrictive Kafala system with a more flexible, contract-based employment model, designed to provide workers with greater independence and control over their professional lives. Under the reformed regulations, migrant workers will now have several crucial new rights:

• Freedom to Change Employers: Workers can change jobs without needing prior approval from their current employer, typically after completing their contract or providing appropriate notice.
• Freedom to Exit the Country: The requirement for an exit visa or sponsor consent to leave Saudi Arabia has been removed.
• Improved Legal Protections: Migrant workers will have enhanced access to labor courts and complaint mechanisms, allowing them to report mistreatment or demand unpaid wages more safely.

These changes aim to reduce the power imbalance that previously allowed employers to confiscate passports, withhold wages, or restrict movement, practices that human rights groups often likened to 'modern-day slavery'.

Background and International Scrutiny

The Kafala system, meaning 'sponsorship' in Arabic, emerged in the 1950s to regulate the influx of foreign labor needed for the rapidly developing oil-rich economies of the Gulf states. However, it evolved into a system that granted employers significant control over workers' lives, leading to widespread criticism from international bodies such as the International Labour Organization (ILO) and various human rights organizations. These groups consistently highlighted cases of exploitation, abuse, and a lack of legal recourse for migrant workers.

The decision to abolish the system reflects Saudi Arabia's commitment to aligning its labor laws with international standards and improving its human rights record, particularly as it seeks to attract global talent and host major international events.

Looking Ahead

While the Saudi government has hailed these reforms as a significant step forward, human rights organizations emphasize the critical importance of robust implementation and monitoring to ensure that the changes translate into tangible improvements for workers on the ground. The true test will be whether the new contractual system effectively safeguards workers' rights and prevents the abuses that were prevalent under the Kafala system.