Saudi Arabia Ends ‘Kafala System’, Major Relief for Over 13 Million Migrant Workers

Riyadh, October 22 (Daily Kiran): In a landmark labour reform, Saudi Arabia has officially abolished the decades-old Kafala system — a sponsorship-based labour model long criticised as a form of “modern slavery.” The decision, announced in June 2025, has now come into full effect, marking a major step toward improving migrant welfare and labour rights in the Kingdom.

The reform is expected to benefit around 13 million migrant workers, most of whom come from South and Southeast Asia — including a large number of Indians. With this change, working in Saudi Arabia has become easier and more flexible for foreign employees, ending years of restrictive employer control.

What Was the Kafala System?

The term Kafala, derived from Arabic, means sponsorship. Under this system, every foreign worker was tied to a local employer, known as a Kafeel (sponsor), who had complete control over the worker’s employment, residence, and legal status. Migrants could not change jobs, leave the country, or even seek legal assistance without the sponsor’s permission.

Introduced in the 1950s, the system was initially designed to regulate the employment of low-cost foreign labour needed to build oil-rich Gulf economies. Over time, however, it became a tool for exploitation — with employers often confiscating workers’ passports, delaying or denying wages, and restricting their movement.

From Exploitation to Reform

Although the Kafala system was intended to support migrant workers by ensuring accommodation and welfare through sponsors, it evolved into a mechanism of abuse. Workers were often trapped, unable to return home or report mistreatment without risking deportation.

Human rights groups have long compared Kafala to “bonded labour,” arguing that it stripped workers of their basic freedoms. The end of this system is being hailed as a turning point in Saudi Arabia’s labour history.

Part of Vision 2030 Reforms

The abolition of the Kafala system aligns with Saudi Arabia’s Vision 2030, an ambitious national reform plan aimed at economic diversification and improving human rights standards.

Under the new contract-based employment model, foreign workers can now change jobs without their employer’s consent, provided they fulfil contractual obligations. They also have greater freedom of movement and legal protection.

According to the Saudi Press Agency, these reforms are designed to promote a fairer and more transparent work environment, enhancing the Kingdom’s global image and strengthening its labour market.