Understanding the New Kafala System in Saudi Arabia

The kafala system in Saudi Arabia is a legal framework that historically regulated the relationship between foreign workers and their sponsors (usually employers).This new system shifts the focus from strict sponsor control to a contractual relationship between the worker and employer, simplifying procedures like sponsorship transfer and travel permissions.

Understanding what is the kafala system, how it works, and the current rules is essential for foreign workers and employers alike to navigate the labor market in Saudi Arabia effectively.

Kafala System in Saudi Arabia

• It governs the relationship between foreign workers and their employer (sponsor).
• It is implemented in most Gulf countries, including Saudi Arabia.
• Considered a fundamental system for managing foreign labor in the Kingdom.
• The worker cannot leave or enter Saudi Arabia without the sponsor’s approval.
• Changing employers requires the current sponsor’s permission.
• The worker’s residency and renewal are tied to the sponsor, not the state.
• The sponsor handles visa issuance, residency, and travel-related processes.
• Clearly defines legal responsibilities for both the sponsor and the worker.
• Provides the worker with a good salary and a decent standard of living.
• Allows expatriates to build a stable professional and social life in Saudi Arabia.
• Contributes to the economy by attracting skilled professionals from abroad.
• On March 14, 2021, Saudi Arabia began implementing the Labor Reform Initiative (LRI).
• The initiative allows foreign workers to:
  • Change jobs without the sponsor’s consent (under certain conditions).
  • Leave and return, or permanently exit, the country without sponsor approval.
• Aims to reduce reliance on the traditional Kafala system.
• Applies to professional workers registered under the labor law.

New Kafala System in Saudi Arabia

• The current system is based on a direct contractual relationship between the foreign worker and the employer, without the need for a sponsor to control the worker as was the case under the previous sponsorship system. All negative consequences of the old system—such as imposing unagreed-upon penalties—have been abolished.
• After the employment contract ends, a foreign worker is allowed to remain in the Kingdom for up to 3 months. During this period, they are permitted to search for a new job opportunity without being required to leave the country immediately, providing greater flexibility and professional stability.
• If the worker has any outstanding financial dues that have not been paid by the employer, the Ministry of Human Resources and Social Development intervenes as the responsible authority to ensure the worker’s rights and resolve disputes fairly.
• The Ministry also works in direct coordination with specialized recruitment companies to facilitate the process of hiring foreign workers within a regulated framework, ensuring that recruitment aligns with the needs of the Saudi labor market and contributes to its development.
• Among the new requirements for expatriates to be eligible for work in the Kingdom is the obligation to pass a professional competency examination, which verifies the worker’s qualifications and suitability for the designated job, helping to ensure the quality and efficiency of the foreign workforce.

Read also: Complete Guide to the employment contract in Saudi Arabia

Requirements for Terminating the Kafala System in Saudi Arabia

• The foreign worker must have completed at least one full year of employment with the same employer or sponsor in order to be eligible to submit a request for sponsorship cancellation.
• If the worker wishes to transfer to another organization, they are required to notify their current sponsor at least three months in advance. This notification should be submitted via official channels, such as email or other recognized communication methods.
• The worker must be officially registered in the Saudi labor system, and must comply with all procedures and regulations governing the sponsorship cancellation or transfer process, in accordance with current Saudi laws.
• It is essential that the worker has paid all applicable fees to the Ministry of Labor. The exact amount can be obtained by contacting the Ministry of Human Resources and Social Development or by using the available online services offered through the labor office’s platform.

Check Out: How to Apply for a Saudi Arabia Work Visa Without Complications?

Professions Exempted from New Kafala System in Saudi Arabia

Although Saudi Arabia announced the cancellation of the kafala system in Saudi Arabia, certain professions remain excluded from this reform and are still subject to the traditional sponsorship regulations. These exclusions mean that workers in these roles do not benefit from the recent changes that allow job mobility and transfer of employment without sponsor approval.

The official authorities have identified five main professions that remain under the previous kafala syste in Saudi Arabia:

• Private driver
• Security guard
• Domestic worker
• Shepherd
• Gardener

These roles are generally considered part of the domestic or direct personal service sector, and thus, they fall outside the scope of the labor reform initiative aimed at abolishing the kafala system for professional and private-sector workers

Learn About: Marriage in Saudi Arabia for Foreigners: Comprehensive Guide

Conclusion

The new kafala law in Saudi Arabia marks an important milestone in reforming labor regulations and enhancing the rights and freedoms of foreign workers. For expert legal guidance and support related to the kafala system and labor matters in Saudi Arabia, consulting a reputable firm like Etqan Law Firm can help ensure compliance and safeguard your rights effectively.

The Etqan Al Mutamayza Law Firm is ready to provide the essential support you need. You can reach their team at the following mobile numbers: +96656113776, +966541110440, +966504315333.

Additionally, feel free to visit our branches located at:

• Jeddah: Al-Aziziyah District, Mohammed bin Abdulaziz Street (Tahlia)
• Riyadh: King Abdulaziz Street, across from the Kingdom Tower
• Dammam: Al-Ashri’a Street, Al-Badeea, Dammam 32415.

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