The report by PricewaterhouseCoopers (PWC), the auditor, noted improvements regarding issues such as retention of passports and increased commitment to welfare, but said most workers were still paying fees to outside recruiters to get jobs in the UAE.
The study was compiled from more than 1,300 interviews with workers between June last year and May this year, and is the first annual report from an independent monitor presented to the island's developer, Tourism Development and Investment Company (TDIC).
TDIC tasked PWC with evaluating compliance with its Employment Practices Policy (EPP), the set of standards developed in 2009 for contractors working on Saadiyat.
"TDIC faces significant challenges in implementing the EPP, operating against the backdrop of a complex construction sector in the Middle East region with established practices and norms that are not necessarily all aligned with the EPP requirements," the report said.
PWC found more than two-thirds of workers had paid recruitment or relocation fees in their home countries to work on the island's construction sites, "a key issue that needs to be addressed". According to the EPP, contractors must reimburse employees for these fees but most workers could not produce receipts. Other contractors said they believed they did not have to repay workers because none of them were recruited specifically for projects on Saadiyat Island.
Various estimates have found that workers paid between US$900 (Dh3,305) and $3,350 in recruitment fees to get jobs in the UAE.
PWC noted that TDIC has little control over recruitment practices overseas but the developer "now requires contractors to conduct their own diligence on recruitment agents used to recruit workers and to provide a list of these agents".
Some workers noted maintenance issues at the Saadiyat Construction Village, where 55 per cent of the interviewed workers lived. Complaints included poor sanitation and faulty air conditioning.
TDIC has committed to improving accommodation and forcing all contractors to reimburse labourers for recruitment fees.
"We recognise that transparency on these findings is important and we have already taken action to improve the areas highlighted," said Sultan Al Mahmoud, the chairman of TDIC's corporate social responsibility committee, in a statement released by Wam, the state news agency.
"We realise that there are certain points that need further attention and, as always, TDIC will continue its commitment to working with all relevant parties - its contractors and partners - in overcoming any challenges to secure an internationally recognised standard of living for workers."
A revised EPP has been developed and includes penalties for noncompliance. A percentage of the fines received will be used to enhance the island's welfare and living conditions.
The report also noted that some areas of concern had shown significant improvement. During an initial visit, the monitor found that 89 per cent of workers had possession of their passports. That figure climbed to 97 per cent.
The report includes interviews with Saadiyat's main contractors and a sample of eight subcontractors working on four major projects. Investigators also visited the Construction Village and six other accommodation facilities, carrying out unscheduled interviews and tours.
TDIC has pledged to implement new programmes this year, including conducting surveys with labourers and studying the impact of working on Saadiyat on their livelihoods.