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Saudi Arabia introduces new amendments to Labour Law regulations

On August 29, 2019

Saudi's Minister of Labour and Social Development has issued a ministerial order revising the labour law’s executive regulations. The amendments include a table of labour law violations corresponding penalties, some which are new or updated with increased fines.  The order also establishes an “Accreditation Center” which authorizes the imposition of these penalties.

The order stipulates that the Ministry should bring lawsuits against the violators via labour courts. Employers can object to penalties by reporting to the Ministry within 30 days from the date they were notified of the violation. 

The decision also includes a number of articles explaining the duration of the implementation of the fine and administrative decisions relating to the imposition of penalties and closure of violating firms.

According to the Ministry of Labour and Social Development, the new regulations come as part of the Ministry’s efforts to regulate the Saudi labour market and raise the level of accountability and competitiveness of private enterprises.

In line with these reforms, the Ministry of Labour and Social Development has also recently launched an instant labour visa service for private firms with high Saudisation rates who fully comply with the ministry's regulation. The service allows eligible employers to obtain work visas immediately, without having to go through the usual, lengthy government approval process.  

The Saudi government has taken steps to reform the labour law’s regulatory framework and the treatment of migrant workers in the past, but large gaps persist between law and enforcement. This latest effort may incentivize employers to comply with the labour law if penalties are consistently imposed but the country’s weak complaints mechanisms will likely hinder migrant workers from reporting abuses. Workers are also unlikely to benefit from the fines themselves. 

 

Some of the violations and the corresponding penalties relevant to migrant workers include:

Violations Penalties
Owner of a firm that doesn't use the Arabic language in work contracts, data and records, employees records and written instructions employer gives to the employees  5,000 Saudi Riyals
Owner of a firm that doesn't keep employees' data and records (physical or electronic) in the company's main office: employees names, salary, medical, attendance and leave records. 5,000 Saudi Riyals
Owner of a firm who provides incorrect information or data to the ministry in order to get any services or privileges or work visas from the ministry

(25,000 Saudi Riyals)

Multiplied by the number of workers benefited or number of work permits issued

Selling work visas or act as brokers in the sale of work visas

(50,000 Saudi Riyals)

Multiplied by the number of visas sold

Employer confiscate employee’s passport, Iqama or the health insurance of the employee and his or her family members

(5,000 Saudi Riyals)

Multiplied by the number of workers

Employers who allow a non-Saudi employee to work in a profession other than listed in his or her work permit

(10,000 Saudi Riyals)

Multiplied by the number of workers

Employer hiring a non-Saudi worker without a work permit

(20,000 Saudi Riyals)

Multiplied by the number of workers

Employer charging the worker with fees and costs that the employer must bear 

(10,000 Saudi Riyals)

 Multiplied by the number of workers

Employer hiring non-Saudi workers in professions designated for Saudis

(20,000 Saudi Riyals)

Multiplied by the number of workers

Employer reporting a false "runaway" case against an employee 

(20,000 Saudi Riyals)

Multiplied by the number of workers

Employer hiring a worker without a written and certified work contract as per ministry regulations

(1,000 Saudi Riyals)

Multiplied by the number of workers

Employer does not return worker ‘s  documents or certificates after work termination

(5,000 Saudi Riyals)

Multiplied by the  number of workers

Employer fails to pay workers wages on time or pays in unofficial currency or fully or partially withholding wages without legal permission

(3,000 Saudi Riyals)

Multiplied by the number of workers

Employer fails to comply with the wage protection system (10,000 Saudi Riyals)
Employer not giving employees a weekly day off or increasing the employees’ working hours more that what is stated in Article (98) of Labour Law without overtime pay

(10,000 Saudi Riyals)

 Multiplied by the  number of workers

Employer  fails to comply with the regulations with regard to allowing employees to avail of their scheduled vacation

(10,000 Saudi Riyals)

 Multiplied by the number of workers