Mideast: Kuwaiti Labor Reforms Set The Stage For A Workforce Rebalancing
YASSER AL-ZAYYAT
With nearly 80% of Kuwaitis employed in public sector jobs, Kuwait’s private sector has long been extremely dependent on foreign labor and its public payroll strained by a high dependence on government work. As of late 2025 and early 2026, however, new resolutions put into effect by the National Assembly are aiming to uproot the existing system of exploitative private sector labor and rebalance the scales of employment.
The concerns surrounding foreign labor are not new; the Kuwaiti workforce has been split in such a way as far back as the 1960s, when the oil boom sought out international workers to fill positions in the rapidly expanding industries. In the meantime, Kuwaiti nationals overwhelmingly moved towards secure, higher-paying government jobs, leaving the amount of Kuwaiti workers in the private sector hovering at merely 4% for decades.
It quickly became apparent to those running the system that the growing population of foreign workers, whom the private sector had become reliant on, could easily be exploited and robbed of their wages with the protection of employment laws, a lack of immediate oversight, and little accountability for bad actors. This meant that, by the 80s and 90s, fraud and exploitative practices had become systemic issues ingrained in the entirety of the Kuwaiti private sector — which they remained, until recently.
The residency and employment exploitation imposed by Kuwaiti private employers has had a devastating effect on those who are at their mercy. For these workers, their employers are often the arbiters of not only the security of their work, but also their residency, ability to travel, and ability to feed themselves and their families. Overwhelmingly, private employers have chosen to take advantage of their position and the vulnerability of the people working for them for their own monetary gain.
Under the Kafala sponsorship system, foreign employees were tied to their initial employer in the country for a minimum of 1 year without the ability to voluntarily leave and find another sponsoring employer. This meant that because foreign workers were completely under the thumb of their employer if they wished to remain in the country, employers could pay extremely low salaries, provide substandard living and working conditions, and completely bypass market competition — as a result, Kuwaiti private sector wages are severely artificially suppressed.
Practices such as passport stealing, wage theft, and forced overtime became not only a pervasive issue, but the norm itself. Employers stole far beyond simply documents and money, more accurately taking entire years of people’s lives, keeping them trapped in these positions for long after their mandatory period had passed and the possibility to transfer hypothetically arrived. Having come to Kuwait seeking better opportunities, it has been argued they were instead treated much closer to indentured servants or slaves, essentially defenseless against their employers.
The changes implemented in early 2026, however, sought at long last to bring an end to this system and introduce a fundamental rebalancing of employees across the workforce.
Where it was once significantly cheaper to use foreign labor because of the meager wages they could be paid without repercussion, the new rules will make it significantly more costly and time-consuming for employers to retain foreign workers, with a mandate for employers to comprehensively report daily shift logs, break periods, and holiday tracking directly to the government tracking system. It is the aim of these policies that the mistreatment of foreign workers slipping through the cracks will finally come to an end; the worker can now immediately file a complaint with the Public Authority for Manpower (PAM) and switch to a competitor if there is wage or residency permit maltreatment.
A further compliance roadblock has been established through local Kuwaiti banks that will immediately flag any payment that does not match the salary an employee should be getting, and if employers cannot provide justifying documentation within a strict timeframe, their entire corporate accounts will be frozen.
Common visa traps, in which an employee would officially hire a worker for one position and then force them to perform dangerous or unauthorized work, have also been targeted by these new policies. If the government notices any discrepancies between the work a foreign worker is doing and their verified academic qualifications and official job classification, the company is blocked from hiring additional workers or being involved in the issuing of any new visas.
All in all, these reforms have constituted a complete reformation of the Kuwaiti workforce — which not all people see as being for the better. Employers in the private sector have already begun to feel the constraints of the new rules as their previous organizational practices are beginning to be overhauled and accountability is instituted in their place. Small businesses and the agriculture sector are particularly affected, with foreign workers fleeing small businesses for larger, more compliant corporations that were quicker to make the transition or needed to make less of a fundamental change to their operations.
As for now, Kuwait is living between the momentum of the recent changes and the slowdown of the practical structural transition, with workers getting to exercise their expanded rights for the first time and the labor market poised for change. It will remain to be seen over the coming months whether the implementation of the new system will hit snags or be able to push forward its sweeping rearranging throughout the Kuwaiti workforce without significant resistance. What can be said with certainty, however, is that for a country whose labor market has long relied on entrenched systems of sponsorship and migration, these reforms represent more than a mere legal update — they signal a broader shift in how business, immigration, and worker protections are fundamentally understood in Kuwait.
