GCC kafala reform: where Gulf labour systems actually stand in 2026

Kafala — the sponsorship system that tied a migrant worker's legal status, mobility, and often physical presence to a single employer-sponsor — was for decades the operating system of GCC labour markets. Since 2017, every GCC country has formally announced reforms. The honest answer to 'has kafala been abolished?' is country-by-country and sector-by-sector — and even where the legal structure has changed substantially, on-the-ground practice often lags. This article is the working summary for HR operators hiring across the GCC.

What kafala is (and isn't)

Strictly, 'kafala' is an Arabic word meaning sponsorship or guarantee — historically a moral and legal concept of one party taking responsibility for another. As applied to GCC labour markets from the mid-20th century onward, kafala meant: a foreign worker's visa, residence permit, ability to change jobs, and ability to leave the country were all controlled by their employer-sponsor (kafil). At its strictest, an exit-permit system meant a worker could not legally leave the country without their sponsor's permission.

Reforms since 2017 have unbundled this. The visa, residence permit, job-change permission, and exit permission are now separately regulated, and many have been transferred from employer control to the state or to the worker. But the unbundling is partial and varies.

Country-by-country reform status

Qatar (most-watched reformer)

Qatar's 2020 reform package — driven by ILO partnership and World Cup scrutiny — removed the No-Objection Certificate requirement (workers can change jobs without employer permission, subject to notice) and introduced a non-discriminatory minimum wage of QAR 1,000 plus QAR 500 housing and QAR 300 food allowances (or in-kind equivalents). The exit permit was abolished in 2018 (with narrow exceptions). The Wage Protection System is mandatory.

Implementation lags exist. ILO and Human Rights Watch reports document ongoing wage theft, retaliation against workers who try to change jobs, and recruitment-fee charging. But the legal framework genuinely changed; the question is enforcement depth.

Saudi Arabia (largest reformer by scale)

Saudi's 2021 Labour Reform Initiative covers ~10 million private-sector foreign workers — the largest by population. Workers in compliance with their residency obligations can change jobs without employer consent, exit and re-enter the country independently, and obtain their own exit/re-entry permits via the Absher app.

Limits remain: domestic workers are explicitly excluded from these reforms (they are governed separately, with weaker protections); changing jobs still typically requires fulfilling the initial contract period (often 1 year) or providing notice; and the 'compliance' threshold (current residency, no debt to employer) can be weaponized in disputes.

UAE (boldest visa innovation)

UAE Federal Decree-Law 33/2021 (effective February 2022) overhauled the federal labour law. Combined with the green visa (10-year, employer-independent residence for skilled workers and certain investors), the golden visa, and the unemployment insurance scheme (mandatory from 2023), the UAE has gone furthest in de-coupling residence from a single employer. Workers can switch employers without losing residence; six-month grace periods after job loss; unemployment insurance pays 60% of basic salary for up to 3 months.

Wage Protection Systems (WPS)

Wage Protection Systems are mandatory digital wage transfer regimes monitored by the labour ministry. The employer files monthly wage data; the central bank or labour ministry verifies that the agreed wages (from the registered employment contract) were transferred on time to the worker's registered bank account. Delays or shortfalls trigger automatic penalties and can block new visa quotas.

From the HR operator perspective, WPS is the single most consequential operational change. It ended cash wages, made wage theft far harder, and created a documentary trail visible to authorities. It also means: payroll cannot be late, wage cuts require contract amendment filings, and any informal 'adjustment' (deductions for housing, advances, etc.) must be properly contractualized or it shows up as wage theft.

No-Objection Certificates: gone, reformed, intact

The NOC was the operational expression of kafala: a worker wanting to change employers needed their current employer to sign a No-Objection Certificate. Without it, the worker could not legally take a new job in-country and often had to exit and re-apply from abroad.

Domestic workers — the slowest reform front

Domestic workers (housekeepers, drivers, nannies) — estimated 3–4 million across the GCC, overwhelmingly women from South Asia and East Africa — are largely excluded from mainstream labour-law protections. Each GCC country has a separate domestic worker law (Bahrain 2017, Kuwait 2015, Saudi 2013, Qatar 2017, UAE 2017, Oman 2023). These laws are weaker than the standard labour code: longer working hours allowed, weaker rest-day enforcement, exit-permit requirements often retained, and limited access to courts in some jurisdictions.

For HR operators at corporates, domestic workers usually fall outside scope — but understanding the asymmetry matters for any policy on driver/nanny benefits offered to expatriate employees and for any corporate social responsibility positioning.

HR operator implications

1. Treat your employment contract as the source of truth — WPS will pay only what the registered contract says.
2. File any compensation change (raise, bonus structure, allowance adjustment) via formal contract amendment before paying it — otherwise WPS flags it.
3. Build offboarding into your standard process: cancel residence promptly on departure (typically within 30 days of last working day), settle end-of-service gratuity, and provide experience certificate.
4. Understand your country's end-of-service gratuity formula (varies — typically 21 days/year for first 5 years, 30 days/year thereafter, capped at 2 years total). UAE has begun moving to a Savings Scheme alternative to traditional gratuity (DEWS for DIFC, federal pilots).
5. Pay recruitment fees yourself — do not charge workers, even indirectly. The Employer Pays Principle is now a brand-due-diligence standard (especially under CSDDD) and a recurring audit finding.
6. Maintain a clear escalation path for worker complaints. Several countries have established independent labour-dispute committees or hotlines — ensure workers know how to access them.

Common mistakes

• Assuming 'kafala is abolished' uniformly — reform depth varies by country and by worker category.
• Holding passports — illegal in every GCC country (since 2014–2018 amendments) but still widely reported. Strict prohibition; audit your own practices.
• Charging recruitment fees to workers or accepting recruiter arrangements that do — a CSDDD-era buyer-audit issue.
• Late WPS filings or wage transfers — automatic penalties and quota blocks.
• Treating end-of-service gratuity as optional or negotiable down — it's a statutory entitlement, calculated to a formula. Underpayment is the most-litigated end-of-employment claim.

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