Saudi Arabia Abolishes Controversial ’Sponsorship’ System for Foreign Workers

The Ministry of Human Resources and Social Development of Saudi Arabia had decided, in early November 2020, to implement a new social policy, including the abolition of the "sponsorship" system for foreign employers, including Moroccans, in order to improve labor relations between them and their employers.

With this reform that came into effect on Sunday, March 14, 2021, foreign employees will be able to freely enter and leave the territory, leave a job for another without prior authorization from the employer, while respecting the notice period and the specific clauses of the current employment contract.

All foreigners working in private sector establishments (6.27 million at the end of 2020, or 78.2% of the national workforce according to data from the General Corporation for Insurance) can benefit from this measure under certain conditions. He must justify the exercise of a professional occupation subject to the labor regime, and a minimum experience of one year since his arrival in Saudi Arabia. In the event of unilateral termination of the employment relationship, he must send an electronic notification (notice) to the employer within 90 days.

The reform aims to improve the competitiveness of the labor market in Saudi Arabia and reduce inequalities of opportunity between Saudi and expatriate workers, according to a statement from the Saudi Ministry of Labor. According to data from the General Authority for Statistics, the unemployment rate in Saudi Arabia was around 14.9% in the third quarter of 2020.