The Gulf Arab states are investing billions of dollars in economic diversification, infrastructure, and global investment. Yet, much of this transformation remains dependent on migrant workers who bear a disproportionate share of its physical, financial, and social costs. Each of the Gulf Cooperation Council states has reformed the kafala system that ties a foreign worker’s legal status to a local sponsor, but the issues facing migrants are deeper. The migrant economy often transfers recruitment debt, housing costs, and administrative expenses onto workers who already face family separation, health risks, and employment insecurity, even as the benefits of development accrue to the elite.
The migrant economy often transfers recruitment debt, housing costs, and administrative expenses onto workers who already face family separation, health risks, and employment insecurity.
Over the last decade, states have introduced labor reforms, including wage-protection systems, work-hour restrictions, occupation-safety provisions, and legal mechanisms for changing employment or leaving the country. However, the existence of laws does not mean they always work. The questions are: What happens when low-wage migrant workers attempt to exercise their rights? Can they recover unpaid wages quickly? Can they leave an abusive employer without risking legal status or income loss? Can they change jobs without incurring new administrative costs? Can they afford alternative accommodation if employer-provided housing is taken away? And what happens when a worker becomes sick or disabled after years of occupational exposure, particularly when complications appear after the employment has ended?
Many migrant laborers face early expenses. Recruitment agents can charge substantial sums, pushing some workers into debt before they even earn their first paycheck. Laws may prohibit recruitment fees from workers, but workers lack the bargaining power or information necessary to challenge illegal charges. On arrival at the destination, visas, residency documentation, medical examinations, transportation, accommodation, and other requirements can generate expenses for workers, particularly when employers shift onboarding costs onto the worker. A worker may earn a wage that appears good on paper while retaining substantially less after migration-related costs, debt repayment, and remittances.
Housing is a blind spot. Gulf Arab development is visible in luxury towers and master-planned cities, but workers’ accommodations can remain overcrowded, unhygienic, and located far away. Employer-provided housing creates dependency; losing a job would mean losing both income and accommodation.
Another issue that illustrates the difference between formal legal protection and practical autonomy is the retention of workers’ passports by employers. Legal restrictions on employers holding workers’ passports exist across the Gulf Cooperation Council countries, although rules and their enforcement vary widely by country and category of worker.
Millions of migrant workers support families. Low-paid workers almost always must leave their families behind. Children grow up separated from parents, and the pressure to remit money even when employment conditions deteriorate intensifies stress. To challenge an employer acting unethically can mean not only losing a job but also endangering the worker’s family’s financial future.
The risks become particularly acute in construction and mega-projects. Government-funded projects pass through multiple layers of contractors and subcontractors. When events like the Iran war cause governments to delay, scale back, or abandon projects, financial losses trickle down to the workers who have no recourse when wages go unpaid or employment and accommodation are cut.
To challenge an employer acting unethically can mean not only losing a job but also endangering the worker’s family’s financial future.
Sickness remains an issue. Employers do not always abide by summer working hours restrictions. Compensation designed for identifiable workplace accidents does not recognize cumulative illnesses or disabilities that appear after employment ends.
Just because formal rights exist on paper, does not mean they translate into meaningful reform. In 2025–26, labor-rights violations continued across the Gulf Cooperation Council. In Saudi Arabia, a Dammam-based company stranded 53 Nepali workers without work, pay, or food. Another case involved Filipino women domestic workers who faced overwork, exploitation, and sexual abuse. In Kuwait, many domestic workers face confinement indoors, wage payment delays, and other abuses.
As U.S. financial institutions and investors increasingly interact with Gulf Arab capital and sovereign wealth funds, questionable labor practices increase commercial and reputational risk, and supply-chain transparency. Assigning U.S. diplomats to report upon and regulators to ensure reforms on paper translate into reality may seem intrusive or expensive in the short term, but ignoring such regulation can create far greater problems down the line, not only for migrant workers but also for the investors who seek their labor.
