This article examines labor and migration in the Gulf and variations in the legal provisions for workers. Since the 1970s, there has been a significant increase in South and Southeast Asian worker migration to the states of the Gulf Cooperation Council or GCC (Bahrain, Kuwait, Oman, Qatar, Saudi Arabia and the United Arab Emirates). Over the last four decades, these migrant workers have replaced Arab migrants throughout the Gulf. In order to deal with the massive influx of these workers, Gulf States have instituted a sponsorship system (kafala) which becomes the legal basis for residency and employment. This article analyzes the kafala system used in each Gulf State and explores the factors which account for differences in the structure and legal basis of the sponsor-employee relationship as well as variations in the application of the system to Arab and non-Arab migrant workers. We find that the economy of the GCC country heavily influences the type of kafala system used.