A Comprehensive Guide to KSA Labour Laws in 2025

Saudi Arabia’s labor landscape is rapidly evolving, aligning with the nation’s ambitious Vision 2030. The Kingdom’s labor laws aim to create a balanced work environment, protect workers’ rights, and promote a sustainable economy. Whether you’re an employee or an employer, understanding these regulations is essential. Below is a detailed guide to KSA Labour Laws in 2025, covering work hours, employee rights, Saudization, expatriate policies, and dispute resolution mechanisms.

Work Hours and Leaves

1. Working Hours:
   • The standard workweek in Saudi Arabia is 48 hours, reduced to 36 hours during Ramadan for Muslim employees. Overtime hours are capped, ensuring employees are not overburdened.
   • Overtime compensation is set at 150% of the regular hourly wage.
2. Annual Leave:
   • Employees are entitled to a minimum of 21 days of paid annual leave, increasing to 30 days after five years of continuous service.
   • Public holidays, including Eid Al-Fitr, Eid Al-Adha, and Saudi National Day, are separate from annual leave.
3. Sick Leave:
   • Workers are eligible for up to 120 days of sick leave annually, paid in phases based on the duration of absence.
4. Maternity and Paternity Leave:
   • Female employees receive 10 weeks of maternity leave, with full pay for the first six weeks.
   • Male employees are entitled to three days of paternity leave.

Employee Wages and Benefits

1. Wages:
   • Employers are mandated to pay salaries through the Wages Protection System (WPS) to ensure timely and transparent payments.
   • Minimum Wage: Set at 4,000 SAR for Saudi nationals to encourage employment within the local population.
2. End-of-Service Benefits:
   • Employees are entitled to gratuity at the end of their service, calculated based on the length of employment. Typically, this includes half a month’s salary for the first five years and a full month’s salary for each subsequent year.
3. Medical Insurance:
   • Employers are required to provide comprehensive health insurance for employees and their families, covering a wide range of medical treatments.

Termination and Resignation

1. Resignation Notice:
   • Employees must provide written notice, typically 30 days, unless otherwise stipulated in their contract.
2. Termination:
   • Employers can terminate employees for valid reasons, such as misconduct, but must follow due process. Unlawful termination can lead to legal repercussions and compensation claims.
3. End-of-Service Benefits on Termination:
   • Employees terminated without just cause are entitled to full severance pay as per the labor law provisions.

Saudization (Nitaqat Program)

Saudi Arabia’s Saudization policy, also known as the Nitaqat Program, is designed to increase employment opportunities for Saudi nationals in the private sector. Employers are categorized into bands based on their compliance:

1. Key Points:
   • Companies must meet specific quotas for hiring Saudi nationals, with percentages varying by industry and company size.
   • Non-compliant companies face penalties, including restrictions on renewing expatriate workers’ visas.
2. New Reforms for 2025:
   • The focus is on integrating more Saudi women into the workforce and expanding Saudization to new sectors like technology, healthcare, and hospitality.

Expatriate Workers

Saudi Arabia is home to a significant number of expatriates, who are integral to the nation’s workforce. New reforms aim to make the environment more favorable for skilled foreign professionals while prioritizing Saudization.

1. Labor Reform Initiative (LRI):
   • Expatriates can now change employers without the need for a sponsor’s permission, provided they fulfill contract requirements.
2. Iqama (Residency Permit):
   • Workers must have valid Iqamas, which are tied to their employment contracts. Employers are responsible for the renewal and associated fees.
3. Equal Treatment:
   • Expatriates are entitled to the same workplace protections as Saudi nationals, including health insurance and wage protection.

Women in the Workforce

Women’s employment has seen significant progress, driven by Vision 2030 reforms. New measures include:

1. Equal Opportunities:
   • Employers are encouraged to provide equal opportunities, ensuring gender equality in hiring and promotions.
2. Maternity Protections:
   • Employers must provide safe working conditions for pregnant women and nursing mothers, along with paid maternity leave.
3. Remote Work Options:
   • To support work-life balance, remote working opportunities are becoming more prevalent.

Dispute Resolution

KSA’s labor laws provide a robust framework for resolving disputes efficiently:

1. Labor Courts:
   • Employees and employers can escalate unresolved issues to Labor Courts.
2. Online Resolution Platforms:
   • The Ministry of Human Resources and Social Development (MHRSD) offers online portals for submitting complaints and tracking progress.
3. Mediation Services:
   • Disputes can often be resolved through mediation, reducing the need for lengthy court procedures.

Key Takeaways

Saudi Arabia’s labor laws in 2025 emphasize fairness, transparency, and alignment with global standards. Employees and employers are encouraged to familiarize themselves with these laws to foster a harmonious work environment. By staying informed, companies can ensure compliance, and workers can safeguard their rights. For moree details, consult the MHRSD official website or seek professional legal advice.