Saudi Kafala Ends; Over 2.6 Million Indians to Benefit

Saudi Arabia has formally abolished the decades-old Kafala system, a sweeping change that took effect in June 2025 and reshapes the lives and rights of an estimated 13 million migrant workers in the kingdom, including more than 2.6 million Indians. The reform ends employer control that long restricted foreign workers’ ability to change jobs, leave the country, and access justice. Saudi officials frame the shift as part of Crown Prince Mohammed bin Salman’s Vision 2030 agenda to modernize the economy and make the labor market more dynamic. Rights groups and sending countries describe it as a long-awaited reset for basic worker protections.

What the Kafala system was and what changes now

Under the Kafala system, first introduced in the 1950s, residency and employment were tied to a sponsoring employer (a kafeel). That sponsor had broad control over job mobility and international travel, which made workers vulnerable to exploitation.

The new rules replace sponsorship with a contract-based framework that:
– Recognizes workers’ legal rights.
– Opens direct channels to courts and labor authorities.
– Ties the worker’s legal status to a valid employment contract recorded with authorities, not to a sponsor’s goodwill.

Indian and Saudi officials are coordinating to manage the transition and help resolve disputes, focusing on sectors where Indian nationals are widely employed, such as construction, healthcare, hospitality, and domestic work.

The three most immediate reforms

The most immediate and meaningful relief for migrant workers comes in three main areas:

1. Job mobility
   • Workers can switch employers without the previous sponsor’s written consent.
   • Moves will no longer automatically trigger visa cancellation or deportation.
2. Exit and re-entry
   • The exit visa requirement is gone.
   • Workers can leave and return to Saudi Arabia without employer permission.
3. Personal documents
   • Passport retention by employers is banned, removing a major tool that often trapped people in abusive situations.

Expected economic and personal impacts

India’s large diaspora in the kingdom is expected to feel gains quickly.

• Greater freedom to change jobs is likely to boost wages as employers compete for skills.
• Construction and service firms will need to offer better conditions to retain staff.
• Hospitals and clinics may need to raise salaries to keep nurses and technicians from moving to higher-paying employers.
• As wage delays and contract breaches become riskier for companies, Indian families could see steadier remittance flows. Saudi Arabia already sends more than $10 billion a year back to India.

Analysis by VisaVerge.com suggests these changes could ease pressure on migrant households that rely on regular transfers for school fees, medical costs, and loan payments in major migrant-sending states.

Protections, complaints, and legal access

Rights advocates, recruitment agents, and community leaders say the reform addresses long-standing problems.

• Under Kafala, many workers had no safe way to challenge unpaid wages, exploitative hours, or forced job transfers.
• Even with proof of abuse, sponsors could control exit visas and risked detaining or deporting workers who spoke up.
• Now, workers can file complaints directly with labor authorities and pursue cases in labor courts without sponsor sign-off.

This procedural shift closes a major gap that kept people silent, even when their contracts were violated.

Saudi authorities say penalties apply when employers fail to meet legal duties. Centralized state oversight and recorded contracts aim to reduce gray areas that allowed sponsors near-total control.

Employer adjustments and compliance

Employers face a new landscape and immediate adjustments:

• Legal departments are reviewing contract templates.
• HR teams are updating payroll timelines, overtime policies, and dispute procedures.
• Prime contractors in subcontracting chains will likely push stricter compliance downstream.
• Recruitment agencies must align with the ban on passport retention and ensure workers receive contracts in a language they understand before travel.

Practical examples for workers

For Indian workers in Saudi Arabia, the reform opens practical options previously out of reach:

• A nurse who finds a better offer can move without needing a no-objection letter.
• A construction worker with repeated wage delays can seek new employment and report violations without fear of being blocked from leaving.
• A domestic worker facing abuse can seek protection and leave Saudi Arabia without being trapped by a withheld passport.

These basic rights reduce the leverage that abusive sponsors once held.

Outreach, documentation, and support

India’s diplomatic missions in Saudi Arabia are preparing for the transition by sharing information on complaint processes and new worker rights. Migrant welfare officials and community volunteers urge workers to:

• Keep copies of contracts, pay slips, and any written or digital records of promised terms.
• Use community networks, Indian missions, or Saudi labor authorities if employers retaliate.
• Be informed about legal steps for job changes and exits.

With direct access to Saudi labor institutions, workers have more avenues to resolve disputes—but outreach is essential so they know how to use those channels.

Risks, enforcement, and long-term success

The biggest test is implementation. Laws on paper are only as strong as their enforcement.

Key factors for success:
– Ready systems to handle a potential surge in complaints.
– Clear timelines for case handling.
– Multilingual support and public reporting on outcomes.
– Fast penalties for employers who violate the rules.

Observers caution that long-term success depends on consistent enforcement, prompt complaint handling, and clear penalties. Lessons from Qatar’s reforms around the 2022 FIFA World Cup show that enforcement and monitoring are essential to shift behavior.

Sector-specific notes and challenges

Certain sectors may see early growing pains:

• Domestic work: harder to monitor as work happens in private homes; needs extra outreach and safe reporting channels.
• Oil and gas: large subcontractor networks may lead to uneven compliance initially.
• Hospitality: high turnover may require new scheduling and onboarding practices.

Government guidance on resignations, notice periods, and job transfers—along with multilingual outreach and anonymous reporting—will help surface problems early.

Preventing new forms of exploitation

Alongside protections, both governments should guard against new risks, such as fake job offers or illegal fee collection.

• Awareness campaigns should explain legal job transfer steps and penalties for illegal fees.
• Employers should hire through registered channels and provide written offers with clear terms.
• Recruitment agents must stop unlawful fee collection and provide clear job terms in languages workers understand.

Measuring success and transparency

VisaVerge.com and other observers say success will be measured by the complaint system’s ability to protect workers from retaliation.

• Confidential reporting, prompt investigations, and real penalties build confidence.
• Public, anonymized data on case outcomes would demonstrate that the change is real, not just on paper.

Practical steps for stakeholders

Workers, employers, recruitment agents, and officials can help the transition by doing the following:

1. Workers:
   • Keep passports, contracts, pay records, and proof of promises made by recruiters or employers.
   • Report any attempt to hold passports or other violations.
2. Employers:
   • Update contracts, payroll practices, and HR policies to reflect the new rules.
   • Train staff on anti-retaliation measures.
3. Recruitment agents:
   • Stop unlawful fee collection.
   • Provide written job terms in languages that workers understand.
4. Both sides:
   • Use official complaint channels and honor notice periods to reduce conflict during job changes.

Regional and diplomatic implications

The reform has regional implications. While Saudi Arabia has ended Kafala, variations remain across Gulf Cooperation Council (GCC) countries, creating a patchwork of rules for migrants who move within the region. Advocacy groups hope Saudi change will nudge neighbors toward stronger protections, but emphasize that enforcement—especially for low-wage and domestic workers—must match the promise.

For sending-country governments, the reform could reduce consular workloads tied to exit visas, passport confiscation, and blocked job changes. Joint working groups between India and Saudi Arabia are expected to continue reviewing implementation, especially in sectors where abuses were common under Kafala. Better data-sharing on complaints and outcomes would help both sides spot problems and address them early.

Why the passport ban and exit-visa removal matter

• The ban on passport confiscation addresses one of the most important safeguards: without a passport, a worker is easier to control and less likely to flee an unsafe job. Early enforcement will be watched closely.
• The elimination of the exit visa removes the employer’s power to block travel in emergencies, easing a source of fear and improving mental health, morale, and productivity.

Final outlook

Saudi Arabia’s decision to end the Kafala system is historic in scope. By moving to a contract-based framework and giving workers direct access to legal remedies, the kingdom has taken a major step toward a more balanced labor market. The real measure of success now lies in everyday enforcement and the lived experience of the men and women who build, clean, cook, drive, care, and heal across the country.

If the promises made in June 2025 are kept in practice, migrant workers—and the families who depend on them—stand to gain rights, dignity, and a fairer share of the economy they help power.

For official information on labor rules and complaint procedures under the new framework, workers and employers can consult the Saudi Ministry of Human Resources and Social Development’s website at MHRSD.