Foreign and Migrant Workers in the Middle East: The Kafala System Explained

December 02, 2020

Utilized among Gulf Corporation Council (GCC) countries, the “Kafala System” permits employers to secure foreign workers for needed labor in exchange for items like travel expenses and living accommodations.  However, while the system is widely utilized, it has been strongly criticized for power imbalances leading to mass worker exploitation.
According to the International Labor Organization, the kafala system began in the 1950s as a manner of regulating the use of migrant workers in GCC states.  The system was aimed to be flexible and allow labor needs to be addressed rapidly but decrease during less busy times.  The idea was the sponsoring employer would provide suitable and fair accommodations for the migrant workers in exchange for the work during the contract period.  

Under the system, migrant workers are legally bound to their sponsor-employer for the contract period.   The nature of the arrangement, however, means that workers cannot leave the country or change jobs without first securing written permission. 
According to the ILO and other groups, the power dynamic can create abuses.  However, the set of rights afforded to workers depends on the country where the individual is located.  For example, Kafala workers in Jordan can join unions, leave the country without permission, have a minimum wage and a standard contract, but cannot quit without permission before one year.  Kafala workers in Saudi Arabia currently have none of those rights, though this will change in 2021.  

Providing Kafala workers with additional rights has been a slow push.  However, international attention on the problem has forced changes, albeit slowly, in several jurisdictions including Saudi Arabia which will allow workers to leave and change jobs without permission.  Many groups, including the ILO and international unions continue to protest the practice vehemently.  

Outlook:  The Middle East and Africa are frequently viewed as among the last frontiers for investment from multinational corporations looking to further expand a global footprint.  Companies should be aware of local practices, like Kafala, as they consider investment in the Middle East and work with local entities.