The kafala system (sponsorship system) is a system used to monitor the construction and domestic migrant laborers in Lebanon, Saudi Arabia, Jordan and the small Arab States of the Persian Gulf. The system requires all unskilled laborers to have an in-country sponsor, usually their employer, who is responsible for their visa and legal status. This practice has been criticised by human rights organizations for creating easy opportunities for the exploitation of workers, as many employers take away passports and abuse their workers with little chance of legal repercussions. According to The Economist, "The migrant workers’ lot is unlikely to improve until the reform of the kafala system, whereby workers are beholden to the employers who sponsored their visas. The system blocks domestic competition for overseas workers in the Gulf countries."
Bahrain's repeal of the kafala system
In 2008, Bahrain was the first country in the Gulf Cooperation Council (GCC) to claim to repeal the kafala system. In a public statement the Labor Minister likened the system to slavery. Changes to the Labour Market Regulatory Suggestion were made in April 2009 and implemented starting 1 August 2009. Under the new law, migrants are sponsored by the Labour Market Regulation Authority and can change from one employer to another without their employer's agreement. Three months' notice is required to quit from an employer.
However, in November 2009 Human Rights Watch (HRW) stated that "authorities do little to enforce compliance" with "employers who withhold wages and passports from migrant employees accountable, ... practices [which] are legal under Bahraini law."
According to a 2008 HRW report, under the kafala system in Saudi Arabia, "an employer assumes responsibility for a hired migrant worker and must grant explicit permission before the worker can enter Saudi Arabia, transfer employment, or leave the country. The kafala system gives the employer immense control over the worker." HRW stated that "some abusive employers exploit the kafala system and force domestic workers to continue working against their will and forbid them from returning to their countries of origin" and that this is "incompatible with Article 13 of the Universal Declaration of Human Rights".
HRW stated that "the combination of the high recruitment fees paid by Saudi employers and the power granted them by the kafala system to control whether a worker can change employers or exit the country made some employers feel entitled to exert 'ownership' over a domestic worker" and that the "sense of ownership ... creates slavery-like conditions".
About 1.2 million foreign workers in Qatar, mostly from India, Pakistan, Bangladesh, Nepal, Indonesia and the Philippines, make up 94 percent of the labor force. There are nearly five foreign workers for each Qatari citizen, mostly housemaids and low-skilled workers.
Most of the workers labor under near-feudal conditions that Human Rights Watch has likened to "forced labor". Sharan Burrow, General Secretary of the International Trade Union Confederation, stated "In late 2010 we conducted a risk assessment looking at basic fundamental labor rights. The Gulf region stood out like a red light. They were absolutely at the bottom end for rights for workers. They were fundamentally slave states." An exit visa system prevents workers from leaving the country without the sponsor's permission. Employer consent is required to change jobs, leave the country, get a driver's license, rent a home or open a checking account. Amnesty International witnessed workers signing false statements that they had received their wages in order to have their passports returned. The organization called for an overhaul of the 'sponsorship' system. Arab-American businessman, Nasser Beydoun, who worked in Qatar described their situation as: "Foreign workers in Qatar are modern-day slaves to their local employers. The local Qatari owns you." International media attention increased after Qatar was named the host of the 2022 FIFA World Cup.
The kafala or sponsorship system practised by GCC nations has been stated as the main reason for abuse of the rights of low-income migrant workers.
Little discussed is the fact that high-income professional expatriate workers are also deeply affected by the abuse of the system by companies. A confounding issue is that many of the companies are based out of western nations from the EU, UK, and the US. 
The most typical form of abuse by these companies is the refusal to release employees once their employment has ended with the company. This lack of release (typically through a No Objection Certificate or NOC)restricts employees from moving to another company after employment has ended with the present employer.
This prohibition executed by the company will keep the typical employee from working in Qatar for two years beyond the time their employment ended. In worse cases, the company holds the employee indefinitely in an effort to extort money from the employee when business opportunities fail. From the highest executives to the lowest secretaries, this policy is damaging and serves as a constant threat over the employee.
- "'As If I Am Not Human' — Abuses against Asian Domestic Workers in Saudi Arabia (pdf)" (PDF). Human Rights Watch. 2008-07-08. Archived from the original on 2012-07-23. Retrieved 2012-07-23.
- Harmassi, Mohammed (6 May 2009). "Bahrain to end 'slavery' system". BBC News.
- Montague, James (1 May 2013). "Desert heat: World Cup hosts Qatar face scrutiny over 'slavery' accusations". CNN.
- "The Middle East’s migrant workers: Forget about rights". The Economist. 10 August 2013.
- "Three months after the Sponsorship system in Bahrain was 'scrapped', what really changed?". Migrant Rights. 2009-11-11. Archived from the original on 2012-07-23. Retrieved 2012-07-23.
- "Bahrain: Migrant Workers Denied Pay, Right to Travel". Human Rights Watch. 2009-11-04. Archived from the original on 2012-07-23. Retrieved 2012-07-23.
- "'As If I Am Not Human' — Abuses against Asian Domestic Workers in Saudi Arabia". Human Rights Watch. 2008-07-08. Archived from the original on 2012-07-23. Retrieved 2012-07-23.
- "Qatar: End corporate exploitation of migrant construction workers". Amnesty International. 17 November 2013.
- Morin, Richard (April 12, 2013). "Indentured Servitude in the Persian Gulf". New York Times. Retrieved 17 April 2013.
- Pattisson, Pete (25 September 2013). "Revealed: Qatar's World Cup 'slaves'". The Guardian (UK).
- "A comparison of ‘kafala’ system in GCC; Qatar lags behind on reforms". Retrieved 17 November 2013.