In a landmark labor reform, Saudi Arabia has reportedly scrapped its 50-year-old worker sponsorship program known as the Kafala system.
The decision, which was first announced in June 2025, will affect the rights and lives of around 1.34 million migrant workers – mostly from Southeast Asia and South Asia, including Indians, living in the Middle Eastern country, as reported by India Today.
What is the Kafala system?
The Kafala system, which was implemented in the 1950s and literally means sponsorship system in Arabic, gave employers full control over their employees’ legal status, permanent residency, when or if they could leave the country, seek legal help or even change jobs, the report said. The system tied each sponsor or ‘Kafeela’ to a migrant worker.
Why was the Kafala system criticized?
Originally designed to manage the influx of low-wage migrant labor into the oil-rich country, the system has come to be abused. The Rights Group criticized the policy as “modern day slavery” amid reports of employers exploiting workers, restricting their movement, refusing wages, delaying payments and confiscating their passports. Further, abused employees were also allegedly unable to seek help or return home.
Which workers are likely to be affected?
Saudi Arabia currently has an estimated 1.34 million foreign workers. They make up nearly 42 percent of the kingdom’s population as they depend on migrants for construction work, agriculture, domestic work and more.
Most of the estimated 1.34 million workers are from Bangladesh, India, Nepal and the Philippines.
From a demographic point of view, women who are engaged in domestic work benefit the most from the reform. Global rights groups have repeatedly drawn attention to the mistreatment of domestic workers under the Kafala system.
Why the change now?
Saudi Arabia is not alone in reforming its migrant labor policy. In 2022, under enormous global pressure, when Qatar was named as the host of the FIFA World Cup, Qatar also scrapped similar criticized employee rules.
Saudi Arabia’s decision stems from Crown Prince Mohammed bin Salman’s “Vision 2030,” which seeks to reduce the country’s dependence on oil and rebrand it as a modern and progressive country, the report added.
The country aims to bring its labor standards on par with the global system to attract more foreign investors and skilled professionals, she said.
