This article examines the intersection of state policies, private brokers and local employers that fuels trafficking practices and forced labor of legal labor migrants. Focusing on the Israeli case of labor migration, we offer a meso-level institutional analysis of the modes by which private brokers’s actions combine with state regulations and policies in creating labor trafficking. More specifically, we stress the active role official labor migration schemes play in the growth of a private brokerage sector driven by profit considerations and in the privatization of state capacities regarding migration control and management. Our analysis demonstrates how systemic features – and not necessarily or solely criminal activities – catalyze trafficking practices taking place first and foremost within the realm of legal migration.