Saudi’s Labour Reform Initiative: An Overview

20 min read

Saudi Arabia announced a series of labour reforms over the last few years that claim to loosen Kafala controls and provide more freedom of movement to migrant workers. While largely excluding the country’s most vulnerable workers — domestic - Opens in new tab and agricultural workers — the reforms seemed promising for the roughly 8.5 million migrant workers who fall under the scope of the labour law.

On paper, workers covered by labour law were granted basic rights for the first time — namely the right to transfer jobs and leave the country without their employers’ permission. These processes were also digitised, theoretically making them more efficient and more accessible. The absconding regime (referred to as "absent from work" in the law) was also reformed to enable accused workers to rectify their status and change employers, rather than face immediate detention and deportation.

Qiwa platform

Launched in April 2019, Qiwa is a digital platform that streamlines and digitises various aspects of recruitment and employment for all workers in the private sector in Saudi Arabia. Through Qiwa, employers can apply for visas and work permits for migrant workers. They can transfer workers to their company by sending job offers to workers employed in other companies, which workers then accept or reject.

Additionally, employers are required to use Qiwa to document employment contracts (e-contracts) online for all workers, both Saudi nationals and migrants. Per the law, employers who fail to issue e-contracts for at least 80% - Opens in new tab of their workers will be subject to penalties and suspension of their Qiwa access and services. E-contracts do not replace written contracts, but rather document them. As such, they are issued to migrant workers only after they start their jobs in Saudi and workers continue to report significant differences between the contracts they sign at home and their official e-contracts.

The platform also shows employers their Nitaqat - Opens in new tab status. Nitaqat is a Saudisation initiative that encourages employers to hire a certain number of nationals, depending on the company size and sector, and penalises them for not doing so. It has gradually expanded - Opens in new tab to include more sectors that need to meet a certain quota of Saudi workers. If an employer fails to meet their quota of Saudi hires, they will be blocked from certain Qiwa services - Opens in new tab, such as issuing new visas, transferring workers to the employer’s company, and renewing work permits. The expansion of Nitaqat has led many companies to subcontract workers through mega recruiters to bypass the quota, which often results in worse working conditions.

Migrant workers use Qiwa to review and sign onto their employment contract, accept a job offer if they receive one from another employer, and notify their employer of their intent to terminate an employment contract.

Employers pay an annual fee (around SAR1000 to SAR2000 - Opens in new tab, depending on the number of workers) to use the platform’s services. The platform has a “knowledge centre” - Opens in new tab that includes some guidance for employers and workers on the services offered by Qiwa.

Qiwa is free for workers. They can sign up for its services as long as they have access to Absher, another electronic platform for government services. Absher requires access to a mobile phone and knowing one’s residency ID or a Saudi border access number. Accessing Absher, and therefore Qiwa, is only possible once the worker is in Saudi. Absher is currently only available in English and Arabic.

The Ministry of Human Resources and Social Development (MHRSD) announced in April 2024 that it will also revise absconding regulations for domestic workers, facilitating easier employment transfer under some conditions. These revised regulations were set to take effect in July 2024, per the MHRSD, though it is unclear whether they have been implemented yet.

The impact of these reforms on migrant workers remains unclear, with sparse information provided by the government. In May 2024, the MHRSD reported that at least one million migrant workers - Opens in new tab have benefited from the Labour Reform Initiative (LRI) services since its launch. However, the MHRSD did not provide any details about which LRI services migrant workers benefited from, nor a demographic breakdown. According to the US government's Trafficking in Persons (TIP) 2024 report, “305,444 foreign workers changed employers without the consent of their current employer - Opens in new tab.” The MHRSD also claimed that the LRI had led to a 50% decrease in migrant workers’ labour disputes between March 2021, when it was first launched, and May 2024.

While Ministry data indicate that thousands of workers have availed of these reforms, in practice employers still retain a large degree of control over workers under their sponsorship. These controls are largely in the form of exit visas that employers can issue for virtually any reason, which force workers to leave the country within a set period of time unless they successfully file a labour complaint. The labour complaints system has also seen some reforms, but access to justice mechanisms remain weak and make it difficult for workers to challenge employers’ actions.

The labour reforms, passed through amendments to the labour law and ministerial decisions, have been digitally operationalised through Qiwa - Opens in new tab, an e-government platform available in only Arabic and English (reforms for domestic workers are set to be operationalised through Musaned). Consequently, workers must be both technologically literate and proficient in either Arabic or English to navigate the digital systems. Many low-income workers in particular require additional support that is available at a price from private agencies – that provide services to enable online complaints – which they may not be able to afford.

Kafala reform in phases

The first phase of reforms occurred in March 2021 under the Labour Reform Initiative (LRI). On paper, the LRI allowed migrant workers covered under the labour law (which excludes domestic workers) to:

1) transfer jobs without the employer’s consent, as long as they have been in Saudi for at least one year and;

2) leave the country without permission from their employers.

The second phase also targeted only migrant workers covered under the labour Law. These reforms came into effect in October 2022 with the relaxation of absconding regulations - Opens in new tab, which entitled workers charged with absconding to a 60-day grace period to transfer employment or request a final exit visa and leave the country. If workers fail to take these actions, they will be fined, deported and blacklisted from coming back to the country on a work visa. Previously, absconded workers were subject to immediate administrative detention and deportation.

Changing Employers

Before reforms and Qiwa	With Reforms and Qiwa
Employment transfer (One year or less stay in Saudi as a migrant worker)	Requires employers’ approval	Requires employers’ approval (no change)
Employment transfer (One or more years in Saudi as a migrant worker)	Requires employers’ approval	No employer approval required. Procedure completed through Qiwa (but current employer can issue exit visa in retaliation)
Employment transfer in case of residency ID or work permit issues as follows: Expired residency ID or work permit; Or Employer’s failure to issue a residency ID or work permit within 90 days of hire	Allowed by law without employers’ approval. The procedure to transfer might require an in-person Labour Office visit.	Procedure made easier as no Labour Office visit required (can be done through Qiwa).
Employment transfer in case of: Employer’s failure to pay workers their monthly wages for three consecutive months A worker filed a case that has been brought to the labour courts, and it is found that the employer intentionally delayed the court proceedings The company has a red (noncompliant) Nitaqat status.	Allowed by law without employers’ approval. The procedure to transfer requires an in-person Labour Office visit.	No change.

Once a migrant worker receives a job offer, they accept or reject it, all without the knowledge of the current employer. Herein lies the crux of the reforms and the most beneficial aspects of it to workers. The current employer will only be informed if the migrant worker accepts the offer. Then, Qiwa automatically begins a countdown of the number of days before the migrant worker is transferred to a new employer. The number of days depends on the migrant worker’s contract and the notice period specified in it. The notice period cannot exceed 120 days..

If their current employer is feeling benevolent, they might allow the worker to transfer without issue. Through Qiwa, employers can reduce the notification period to 1 day, effectively transferring the worker almost instantly. However, if the current employer is against the transfer, they can punish the worker by issuing final exit visas.

MRRORS (MR) spoke to three migrant workers who were threatened with exit visas if they accepted a job offer via Qiwa. One migrant worker told MR that “exit visas are the new absconding reports.” Another said “I'm currently stressed because I received a job offer but my old employer is threatening of giving me a final exit instead.”

Exit visas

Before reforms and Qiwa

After Reforms and Qiwa

Exit and re-entry visa

Workers cannot request it. Only employers can.

Workers can request it. Employers will be notified 10 days before the visa is issued. Employers can intervene and object to issuing the visa.

Final exit visa

Workers cannot request it. Only employers can.

Workers can request it. Employers will be notified 10 days before the visa is issued. Employers can intervene and object to issuing the visa.

Workers who issue a final exit visa in the middle of an employment contract will be blacklisted and will not be allowed back in Saudi.

Exit visas have historically been deployed to pressure, manipulate and abuse migrant workers. Workers wishing to leave Saudi for a break from their work or to visit their homes had to secure approval from their employers to obtain an exit and re-entry visa. While some employers allowed their employees to come and go as they pleased, the system enabled employers to weaponise mobility. Workers have been denied their exit for perceived slights or simply as a show of power.

Employers can issue final exit visas in the middle of an employment contract and without prior notice using Absher. The migrant worker must leave the country within 60 days, with the employer responsible for the return ticket. Workers are entitled to receive their salaries, dues, and end-of-service benefits before they leave and to file a labour complaint within this period. Though workers can object to the final exit visa, the justice system is riddled with barriers to access and moves slowly, making it challenging for migrant workers to file a complaint, secure a hearing, and resolve a labour dispute case within this time-frame. Migrant workers who do not leave the country within 60 days will become undocumented and subject to deportation.

Still, many migrant workers leverage the LRI rules and other administrative requirements to resist unwanted exit visas. Two of them filed a complaint, in person, with the Labour Office, showing a job offer from a new employer and proof of residency in Saudi for at least one year, as required by the LRI. With these documents, the Labour Office issued a letter recommending the cancellation of the exit visas that they presented to the Ministry of Interior. While the MoI has final authority on cancelling the visa, both workers succeeded and were able to transfer to their new employer using the LRI as a basis. Another worker, a non-Arabic speaker, said he was lucky to find a Labour Office staff member who spoke English and was able to help him. Without Arabic knowledge or the help of an English speaker, he was not sure if he would have been able to advance his case.

Exit visas, like any bureaucratic process in the labour migration system in Saudi, can be manipulated and weaponised by employers to discipline their employees. However, migrant workers often find resourceful ways to use the system to their advantage, to the degree they can. In the cases mentioned above, migrant workers leveraged these processes to stay in the country and switch to another job, something that would have been difficult to achieve in previous years.

Exit visas and the LRI promises

The LRI granted migrant workers the right to issue an “exit visa” or an “exit and re-entry visa” for themselves through Absher. Migrants have to pay the SAR200 visa fee (which was only paid by employers in the past) and wait 10 days before obtaining it. Employers will be given a notice once an exit visa is requested, and they have 10 days to raise any objections they may have with the MHRSD.

Even after the LRI, migrant workers who request a final exit visa in the middle of their employment contract will be blacklisted and permanently banned from entering the country. Meanwhile, employers can issue an exit visa at any time during the employment contract.

Some workers worry that issuing an exit visa on their own might antagonise their employer. According to one lawyer MR spoke to, once an employer receives a notification (in the form of a text message) that their employee has requested an exit visa, the employer can go in person to a Labour Office (an office of the MHRSD) and submit a request to cancel the visa. Given the inherent biases in the system, employers will most likely be granted their request, or at the very least protract the process to subject workers to financial and psychological stress.

Workers can only obtain a final exit visa without Absher sending a notification to their employer if they have an absconding report against them (see below Phase II).

The right not to renew a contract or terminate employment

	Before reforms and Qiwa	After Reforms and Qiwa
Not renewing a contract	Workers can initiate non-renewal, but employers might not honour the contract clauses. To assert their rights, workers have to file a case online or in-person at the Labour Office, requesting the MHRSD or the labour court’s assistance to not renew the contract.	Made easier with Qiwa and can be done online without the need to file a case with the Labour Office. Employers can still issue an exit visa in retaliation.
Terminating contract during probation period	Workers can initiate termination, but employers might not honour the contract clauses. To assert their rights, workers have to file a case online or in-person at the Labour Office, requesting the MHRSD or the labour court’s assistance to terminate the contract.	Made easier with Qiwa and can be done online without the need to file a case with the Labour Office. Worker most likely has to leave the country.
Terminating contract by a worker in the middle of the contract.	Workers can initiate termination, but employers might not honour the contract clauses. To assert their rights, workers have to file a case online or in-person at the Labour Office, requesting the MHRSD or the labour court’s assistance to terminate the contract. Workers will have to pay off their contract (which often can be the remaining wages owed to the worker in the contract).	Made easier with Qiwa and can be done online without the need to file a case with the Labour Office. Worker most likely has to leave the country. Despite legal entitlements, workers still face difficulties collecting their end-of-service bonuses and unused paid leave.

If a worker or employer does not want to renew an employment contract, they have to give the other party a notice as per the conditions in the work contract. Workers have the right to terminate their employment contract during the probationary period without notice. Moreover, workers who wish to terminate the contract before it ends have the right to do so as long as they compensate the employer for early termination by paying the agreed upon amount as stated in the contract. In practice, the compensation is usually set at two months wages, but the two parties can also agree to terminate the contract through mutual agreement.

Qiwa has introduced a streamlined and relatively user-friendly procedure to terminate employment. Migrant workers can submit a request to:

1) not renew their contract or terminate their contract before it ends, provided they give the employer the specified notice period; Or

2) terminate their contract during their probationary period. Workers can submit requests for non-renewal and termination via Qiwa and employers cannot reject it. However, in retaliation, employers can still issue an exit visa during the notice period.

Phase II: Updating absconding (absent from work) regulations

Before reforms and Qiwa

With Reforms and Qiwa

Absent from work (Absconding)

Employers can file absconding charges at any time. Workers automatically take on an irregular status. Workers can dispute the charge, but it is nearly impossible to remove. Once an absconding charge is filed, workers face fines, deportation, and are blacklisted from future work in and entry to Saudi.

Employers can only issue absconding charges for workers with no e-contract in Qiwa. Workers who receive absconding charges are given a 60-day grace period to apply for an exit visa and leave the country or find a new employer. *

Note: Labour and immigration laws in Saudi Arabia use the term "absent from work" in place of absconding. The terms "runaway" (huroob in Arabic) were previously used by officials, but are no longer in use.

In October 2022, the MHRSD updated its absconding regulations, loosening its efficacy as a retaliatory measure against workers.

Employers can still file absconding reports, but they no longer render migrant workers undocumented automatically. Moreover, the new absconding reports - Opens in new tab can only be issued against workers who do not have, or failed to sign their e-contract (it is the responsibility of the employer to issue e-contracts and follow up with their workers to ensure they sign on it).

Once an absconding report is issued, workers have a 60-day grace period to adjust their status, either by finding a new employer, or obtaining a final exit visa. If workers fail to avail of the grace period, they are considered absconders and are subject to fines, detention, and deportation.

Reforms to domestic workers' absconding regulations

New regulations introduced by the Ministry of Human Resources and Social Development (MHRSD) promise to reduce absconding penalties for domestic workers as well. The regulations state that domestic workers with absconding reports filed against them are no longer subject to administrative deportation and will have a 60-day grace period to leave the country. Moreover, domestic workers with over two years of service can transfer sponsorship after they finish their current employment contracts.

The MHRSD announced that the regulations will take effect in late July. There were no announcements from the MHRSD about beginning the implementation of these regulations as of this article’s publishing. Notably, the Saudi government has issued a new domestic workers law that provides better protections than its predecessor but lacks enforcement mechanisms. The new law is set to take effect in September 2024.

Though reforms to the absconding regime are extensive, the new system still enables grave rights violations. When an employer issues an absconding report, they sever their employment relationship with the worker, effectively denying the worker any claims to end-of-service benefits, bonuses, injury claims, or any other remuneration. Within the grace period, the worker has the right to file a complaint against their employer through the MHRSD labour dispute system if they believe the absconding charges are malicious or false.

However, labour dispute procedures are not always straightforward and time-consuming. Even if disputes can be filed online, workers may need to follow up in person at the labour office to ask for a case status or expedite a hearing date, which can be a costly endeavour as workers must pay for transportation, and any translated materials needed, in addition to taking time off work for those who have secured new jobs. In the 60-day grace period, the worker would’ve lost his or her job, and if they have no savings, they cannot spend their time chasing their case with MHRSD. Labour disputes are also lengthy processes, often requiring more than 60 days to be resolved. In many cases, such as when the phone number of the worker is not updated or linked to their account in the Saudi government system, workers are not notified that they have a case or an absconding report filed against them unless they log into their Qiwa portal, giving them less time to file appeals or use the grace period to transfer to another employer.

Still, this new update has made absconding less appealing to employers to use as a retaliatory measure. One employer told MR that it is now more effective to issue final exit visas to discipline workers rather than an absconding report. Final exit visas can be used to end the employment relationship without having to terminate the contract through labour law mechanisms. Exit visas can be more appealing to unscrupulous employers than termination of contracts. Workers with exit visas are given a certain period of time to leave the country. If they fail to do so, their status becomes irregular, and they will be subject to detention and deportation. Unlike exit visas which by law have barely any consequences, and are seen as a privilege for employers, terminating contracts in the middle of employment can be litigated easier in the justice system.

The Next Steps For Genuine Labour Reform

Although the reforms were mistakenly praised as the end of the Kafala system - Opens in new tab in 2021, the Kafala’s essential components—where workers remain tied to and controlled by their employers—persist. The exact modes of control may have shifted, but the power imbalance remains heavily in employers’ favour. While some important advances have been made, these gains are undermined by employers’ authority to issue final exit visas, the inaccessibility of Qiwa to the majority of migrant workers, and weaknesses in the justice system. As highlighted in MRRORS.org’s analysis of reforms in Qatar and its exploration of other temporary migration schemes, the Kafala system cannot be reformed or fixed piecemeal — it must be completely dismantled.

To do so, the Saudi government must centre labour and human rights in line with international standards; take into account workers' experiences, including input on seemingly sleek but hard to navigate platforms such as Qiwa, Musaned and Absher; ensure there are no loopholes in the system for employers to exploit and abuse; govern with transparency and accountability, including through releasing detailed data on workers leaving the country or transferring or terminating employment without employers’ approval; and build the capacity of the MHRSD and labour court system to handle labour disputes in a speedy, fair and non-discriminatory fashion.

Domestic interests can be leveraged to pursue these changes. While external pressures, including human rights concerns and international reputation — in particular, the country’s ranking in the US Trafficking in Persons report - Opens in new tab — contributed to the current reforms, local concerns have been the primary catalyst. According to one Saudi official, the reforms intended “make Saudis more attractive to private employers who would rather hire foreigners over whom they currently have greater control - Opens in new tab.” At the same time, the MHRSD has also framed these reforms as a way for businesses to reduce the cost of recruiting migrant workers in the country. According to MHRSD documents - Opens in new tab, the measures also aim to reduce the number of workers with irregular status in the region, estimated to be around four million workers in 2019. With both the government and the private sector standing to benefit from these changes, there is a strong foundation to advocate for labour and migration policies that fully safeguard the rights of migrant workers.

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