The labor laws in the Kingdom of Saudi Arabia, KSA otherwise, are a set of rules and regulations that govern the labor practices in the kingdom. Initially issued by the Royal Decree in September 2005, these labor laws have undergone significant amendments, the most recent being 2024.
The recent amendments to the labor laws aim to create an attractive work environment and achieve Saudi’s Vision 2030. This blog explores the KSA labor laws to help prepare employers and employees for the year 2025. It will answer important topics around women’s employment, key changes to the laws, labor regulations, vision 2030, and more. Let’s start.
Vision 2030: What You Need to Know
Vision 2030 is Saudi Arabia’s effort to diversify the economy, develop its public sectors, as well as enhance the overall quality of life for Saudi citizens. The Vision Realization Programs are the driving force behind Vision 2030. Each program has a distinct way forward and an approved delivery plan that meets pre-defined objectives and key performance indicators. Some of the programs included are:
- Fiscal Sustainability Program
- Public Investment Fund Program
- Financial Sector Development Program
- Human Capability Development Program
- National Industrial Development and Logistics Program
Some of the goals, as shared by the key leaders, are:
- Harness the strong investment capabilities to stimulate the economy and diversify it.
- Leveraging the strategic location and transforming it into a global hub connecting Asia, Europe, and Africa.
- Better partnership opportunities with the private sector
Labor Laws: Key Changes & What You Should Remember
The new amendments are said to affect 38 articles of the Labor Law, with 7 articles being deleted and 2 new articles being added. The following is a detailed breakdown of the changes and what you should be aware of in 2025.
Employment Laws: The Basics
Age (for Employers)
KSA has a minimum age requirement for employment. For males, it is 21 years old, and for females, it is 22 years old. Moreover, anyone who is 15 or older but younger than 18 years of age is considered a ‘minor’ and cannot be employed in hazardous roles or any job that endangers their health, safety, or morals. That being said, any individual younger than 15 years cannot work or enter a place of work. These laws apply to every employee, no matter their nationality.
Health & Dress Code (for Employees)
All employees must submit a certificate of fitness by undergoing a medical assessment at an accredited medical center to prove their fitness for the role. As for dress codes, females have a dress code that is suggested to follow in the workplace. The dress code is as follows:
- Top: Full-sleeved clothing with a high neckline and loose-fitting
- Bottom: Full-length and loose skirts or bottoms
Time Management Laws
The time management laws in the KSA regulate working hours, over hours, rest periods, etc. Here’s a breakdown of the hours.
- Working hours: 8 hours a day and 48 hours a week. During Ramadan, the hours are reduced to 6 per day and 36 per week.
- Rest periods: Employees are entitled to a minimum of 30 minutes of break for rest, meals, or prayers after 5 consecutive hours of work.
- Overtime: Overtime hours will be entitled to overtime pay at 1.5 times their regular hourly wage. Alternatively, the employer and employees can agree to a paid compensatory time off instead of overtime pay.
- Weekly rest: All employees are entitled to one day of full rest. Officially, Friday is a weekly off in Saudi Arabia. However, businesses can change this.
- Public holidays: All employees are entitled to paid leaves for the 5 officially recognized public holidays.
- Annual leaves and holidays: After 1-5 years of service, the employees are entitled to 21 days of paid annual leave. This increases to 30 days after 5 years of service.
- Sick leaves: Employees can take up to 30 days of paid sick leave with medical certificates. The next 60 days may go from one-third to the third quarter.
- Maternity Leave: Maternity leave for all female employees has been increased from 10 weeks to 14 weeks now.
- Paid Bereavement Leave: 3 days of paid leave in the event of the death of a spouse or a relative.
- Hajj leave: Muslim employees can take 10-15 days of paid leave to perform the Hajj pilgrimage after completing 2 years.
Saudization
The 2024 amendments have introduced several key measures and reinforced the policy of Saudization. In simple words, Saudization, or Nitaqat in local terms, requires businesses to hire Saudi Arabians. Each business has a hiring quota to fulfill, which depends on the following:
- Classification of the business
- Size of the business
- Percentage of current Saudi Arabians in the workforce
Here’s what the current quota looks like:
- Businesses with 5 or fewer employees must have 1 Saudi employee
- International companies must have a Saudi national holding a role next to a general manager
- Businesses with more than 100 employees need to have 30% Saudization
Probation Period
If the worker is subjected to a probation period, it must be clearly stated in the work contract, and the duration shall not exceed 180 days. Originally, the probation period was 90 days at maximum, and employers had to have a written agreement to extend this period.
Termination
The employment contract can be terminated under the following circumstances:
- Upon expiry of the contract, unless the contract has been explicitly renewed in accordance with the laws.
- Mutual agreement, given that the worker’s consent is in writing.
- The notice period of termination for the fixed contract is a 30-day notice period if the termination is from the employee’s side and a 60-day notice period if from the employer’s side.
- In the case of an indefinite contract, termination can occur due to discrimination by either party. The employer must give a 30-day notice period, while the employee must give a 15-day notice period.
- A new provision for termination on account of bankruptcy has been introduced. The employment contract will be terminated upon the issuance of a final court order in bankruptcy proceedings.
Renewal of Employer’s Work Permit
Previously, the Ministry had the right to decline the request to renew an employer’s work permit if they violated the Saudization requirements set by the Ministry.
Under the new amendment, which is an addition to Article 35, the Ministry can decline the request if the employer violates conditions mentioned in the Regulations, not just the Saudization requirements. Following this amendment, the Regulations will regulate the non-renewal procedures. It ensures that the worker is not affected by the non-renewal of the work permit, including the possibility of transferring the worker’s services to another employer without the consent of the non-compliant employer.
Regulations for Non-Saudis/Expatriate Workers
Although the contract of the non-Saudi was to be written in a fixed term, if the term of employment was not specified, the duration of the contract was considered equal to the duration of the work permit.
Post the amendment, if the duration of the contract is not specific, it is considered to be 1 year from the date on which the worker actually assumes their duties. If the worker’s work continues after the term, the contract is considered to be renewed automatically for a similar term of 1 year.
Furthermore, employers cannot employ non-Saudis for a role other than the role specified in the work permit. Even foreigners cannot change their profession without necessary legal measures.
Training and Development
Before the amendment, the employer was required to ‘prepare’ his Saudi employees and enhance their technical, vocational, and other skills to replace the non-Saudi workers gradually. Moreover, the employer was required to keep a list of Saudi workers who had replaced non-Saudi workers.
Under the new law, ‘prepare’ has been replaced by ‘develop a policy to train and qualify,’ which implies a more structured approach. Furthermore, the amendment removes the requirement of a list. It just states that the Regulations will determine the relevant provisions in this regard.
End-of-Service Payment
The end-of-service payment for the first five years shall be half of a month’s salary for each year of service. For every subsequent year after five years, it shall be one month’s salary for every year.
Conclusion
Having robust HR policies and a foolproof contract for all your employees can help you navigate the KSA Labor laws with ease and comfort. It will also protect you from violating any of the regulations mentioned in the Regulations or outlined by the Ministry and paying a penalty for the same.
If you need assistance in your HR operations or help with navigating the employee agreements, you can contact HRSG. Our cloud-based HRMS platform (Octofy) offers a comprehensive suite of services to streamline and enhance business operations. From AI-powered HR and payroll solutions to tailored talent consulting and rewards strategies, Octofy optimizes workforce and financial management.
