It is vital for both companies and expats living in Saudi Arabia to get it the country’s labor rules. Saudi labor laws center on accomplishing decency between laborers and their bosses. If you are in HR, possess a company or work abroad, making beyond any doubt you take after best hones will offer assistance you dodge breaking the law.
Getting Familiar with Saudi Labor Laws
You should first be familiar with the principles of Saudi labor laws before you begin complying with them. The MHRSD under the Saudi Ministry of Human Resources and Social Development controls how workers are contracted, paid, scheduled, treated and terminated. Labor laws are enforced on all Saudi workers and expats, not including employees in domestic service and others with similar jobs.
As part of the Vision 2030 goals, the labor law was reformed in 2021 to help increase labor force efficiency and productivity. The first thing you should do is follow the latest changes in regulations.
Writing Employment Contracts That Adhere to the Law
Saudi labor laws focus a lot on the subject of employment contracts. Employers should create a written contract in Arabic and can offer a translated version for any workers from other countries. The agreement should clearly define the job title, what will be required, how much workers will get paid, their working schedule and the length of their employment.
If a company wishes to be compliant, it should ensure the job description is specific and retain all copies of signed contracts for later use. A contract can be changed only when both parties agree to the terms in writing.
Slaves should be allowed to rest and work within the legal requirements.
Under Saudi Labor Laws regulations, workers should not work more than 48 hours per week or 8 hours each day. Muslims are only expected to work for 6 hours a day or 36 hours weekly in the month of Ramadan. One hour of rest break is usually given to employees every workday.
Managers should keep track of employee hours so that none of them is forced to work more hours than allowed without being compensated. Anytime you work more than your scheduled hours, you receive a payment of 150% of your normal pay.
Having Fair Wages and Payments Available
Service Charge
Although service charges are not a required fee, they are added if you choose. Saudi labor laws give great importance to protecting wages. Employers are expected to pay their workers on time using bank transfers that can be watched under the Wage Protection System (WPS). Those who do not comply may have to cover fines or lose the right to keep operating their business.
Earning regulations are in force, since employees working for Saudi businesses must be participating in Nita at Saudization. Organizations should ensure their pay structures remain up-to-date with what the Saudi Labor Laws market is offering and with required laws.
Applying Leave and Holiday Regulations
Labor policies under Saudi Labor Laws allow employees paid vacation, leave when they are sick, time for maternity and days for official celebrations. Certainly, employees receive 21 days of paid annual leave upon becoming an employee which increases to 30 days after five years of service.
When a woman has her child, her first 10 weeks are paid leave and fathers get three days of paternity leave. Many workers are granted a paid holiday for Eid al-Fitr and Eid al-Adha. Employers ought to follow proper record-keeping for leaves and easily explain the company’s policies.
Providing assistance with End-of-Service Benefits (ESB)
All employees are entitled to end-of-service benefits under Saudi legislation if they leave the company, so these must be given to them. How many years an employee has worked and how their contract ends are what determines the ESB.
A proper estimation of ESB matters greatly. The employee is paid half a month’s wage for each of the first five years of working. Following that, the rate goes up to a monthly salary for every year you have worked. The company is obligated to ensure that pay is swift and kept on record.
Following the Saudization (Nitaqat) Rules
The Nitaqat program set by the Saudi government asks private companies to hire a specific proportion of workers from Saudi Arabia. Not following the requirement can result in loss of visa services or restrictions on running your business.
Employers have to hire Saudis, train them and make sure they are retained. To effectively organize and manage workforce, businesses should recognize Nitaqat ranking related to company size and the industry they are in.
Taking Appropriate Steps Regarding Disciplinary Actions
In Saudi Arabia, effective disciplinary actions can be used, but they must be conducted according to law. Employers should provide a written explanation to the employee, offer them a fair opportunity to respond and handle the situation with appropriate measures.
Action taken without lawful justification or based on prohibited reasons may result in disputes and a decline in a company’s reputation. When employees are written up with warnings, evaluated or when there are communication issues, the process remains transparent and meets all required standards.
Exploring the process of terminating the connection
Terminating employees following the law is necessary in Saudi Arabia. If an employee has an indefinite contract, employers should justify the dismissal. The notice period in employee contracts is between 30 and 60 days.
The amounts for severance pay, final salary and leave benefits should be worked out correctly. Employees may challenge wrongful termination at the labor courts. Having legal experts and HR training will decrease your chances of facing problems related to terminations.
Maintaining Records for Employees
Employers in Saudi Arabia are responsible for saving records of employee details, including agreements for work, attendance, leave, salary amounts and steps taken for disciplining staff. The records should be kept in a way that allows labor authorities to review them.
Data can be sorted and safeguarded using digital HR systems. If employee records are not accurate, the company may be penalized and have trouble settling employee issues.
Following Changes in the Regulations
Saudi Arabia’s labor structure is being updated as part of its economic and Vision 2030 goals. A common aim of recent reforms is to facilitate movement of workers, increase women’s involvement and strengthen the rights of expats. You should monitor these updates because failing to do so can lead to problems with Saudi labor laws.
Following updates in the law, taking part in seminars and consulting with legal advisors helps companies respond promptly to any changes in the law. You must work towards compliance all the time, as it won’t be finished in one go.
Rounding up: Putting in Place a Compliant Work Culture
Doing your best to keep up with Saudi labor laws is essential for business and also for obeying the regulations. Such policies help people trust each other, avoid unnecessary risks and aid the organization’s future achievements. A company’s HR operations should follow labor law guidelines to support its reputation and ensure its actions are legal, whether it is just being formed or already running.
A solid, compliant and honest company culture in Saudi Arabia is created when businesses handle legal contracts, documents, prompt paying and employees’ rights properly.
