Invest in Saudi: An Overview of Saudi Arabian Labor Law

saudi labor law

Saudi Arabia is taking a big step to protect workers’ rights and promote a fair work atmosphere. In a recent update, the Ministry of Human Resources and Social Development (MHRSD) announced plans to introduce fines and penalties for employers who violate labor regulations. The aim is to tackle labor violations across different employment sectors and ensure a workplace that’s both just and compliant. 

When planning to invest in Saudi Arabia, it is vital to maintain up-to-date knowledge regarding labor laws to adhere to regulations effectively. Recently, on March 14, 2021, Saudi Arabia introduced new labor laws that bring about notable modifications to the existing legal structure. This article aims to delve into the fundamental elements of this new legislation. It encompasses imposing fines for labor infractions and highlighting significant violations along with their corresponding penalties.

New Fines for Labor Violations

The new labor law in Saudi Arabia brings about several new fines for labor violations. These fines aim to strengthen the protection of workers’ rights and improve working conditions. Employers who fail to comply with the new regulations may face substantial penalties.

  • Failure to Provide a Written Contract: Employers who fail to provide written employment contracts to their employees may receive a fine of up to 20,000 Saudi Riyals ($5,333).
  • Non-Payment or Delayed Payment of Wages: Employers who do not pay their employees’ wages on time or fail to pay them altogether may face fines ranging from 3,000 to 15,000 Saudi Riyals ($800 to $4,000).
  • Violation of Working Hours: Employers who exceed the maximum working hours established by the law or fail to grant employees necessary rest periods may be fined up to 10,000 Saudi Riyals ($2,667).
  • Discrimination in Employment: Any employer found guilty of discrimination based on gender, nationality, or any other protected characteristic may incur fines ranging from 25,000 to 50,000 Saudi Riyals ($6,667 to $13,333).

Key Labor Violations and Corresponding Fines

To ensure a safe and fair working environment. It is essential to understand the key labor violations and their corresponding fines under the new labor law in Saudi Arabia. Here are some notable violations and their respective penalties:

1. Employing Foreign Workers Without a Permit

Employers who hire foreign workers without the essential work permit will be subject to a fine of SR5,000 ($1,333). Explore more about the IQAMA in Saudi Arabia.

2. Health and Safety Violations

Employers failing to adhere to official health and safety regulations or neglecting to implement adequate measures for worker protection may incur fines ranging from SR1,500 ($400) to SR5,000 ($1,333). The purpose of this penalty is to uphold a safe and conducive working environment for all employees. 

3. Insufficient Childcare Support

It is a legal requirement for companies with a workforce of more than 50 individuals to offer dedicated childcare facilities or nurseries. Failing to adhere to this regulation will incur a fine of SR5,000 ($1,333), emphasizing the crucial nature of extending support to working parents.

4. Hiring Minors

Employing individuals below the age of 15 is strictly prohibited. Employers discovered breaching this regulation will be subjected to a fine ranging from SR1,000 ($267) to SR2,000 ($533). This measure has been implemented to ensure the protection of the rights and well-being of young individuals.

5. Postpartum Employment of Women

Engaging women in employment within the initial six weeks after giving birth will result in a penalty of SR1,000 ($267). This regulation is implemented to safeguard the health and welfare of new mothers during a vital period of recuperation.

  • Passport Withholding: Employers found withholding passports or residency permits of employees shall be subject to a fine of SR1,000 ($267). This penalty serves as a strong reminder of the utmost importance of upholding personal and legal rights.
  • Failure to Remunerate Employees: Failure to adhere to transferring employees’ salaries on the prearranged dates will result in a penalty of SR300 ($80). The objective behind this regulation is to deter any occurrences of deferred or withheld payments.
Gender-Based Discrimination

Companies found guilty of discriminating between male and female workers. Either within their premises or through the recruitment advertisements they publish. The gender discrimination fine amounts to SR3,000 ($800). This measure firmly emphasizes the imperative nature of fostering gender equality within the workforce.

There are many advantages when you invest in Saudi Arabia, but it’s critical to comprehend and abide by the new labor law. Failure to do so could result in severe financial penalties as well as damage to your employer’s reputation. This law guarantees the placement of worker’s rights on well-being. It not only upholds compliance but also fosters a supportive and effective work environment.

In conclusion, Saudi Arabia’s new labor law demonstrates its dedication to defending workers’ rights and enhancing working conditions. Employers who violate the law are subject to fines for labor violations. 

For further information on how to receive unparalleled support for your company set up in Saudi Arabia, obtain Saudi Arabian visas, or avail PRO services, contact Business Link. Your success in Saudi Arabia starts here!