Saudi Arabia Implements New Labour Law

August 14, 2023

In a significant move aimed at upholding labour rights and ensuring a fair work environment, Saudi Arabia is set to introduce a series of fines and penalties for employers within the Kingdom. As reported by the Saudi Gazette, the Ministry of Human Resources and Social Development (MHRSD) is taking proactive steps to address labour violations across various employment categories. This comprehensive approach underscores the nation’s commitment to fostering a just and compliant workforce.

New Fines for Labor Violations

The forthcoming fines are a direct response to various labour-related infringements that have been observed over time. The MHRSD has worked diligently to amend the schedule of violations and penalties, aiming to strengthen the implementation of labour laws in Saudi Arabia. The new fines are expected to encourage employers to adhere to legal regulations and provide better working conditions for their employees.

Key Labor Violations and Corresponding Fines

  • Employing Foreign Workers Without a Permit:

Employers found guilty of employing foreign workers without the necessary work permit or failing to notify the Ajeer program will face a fine of SR5,000 ($1,333). This emphasizes the significance of proper documentation and legal procedures in foreign labor recruitment. Find out about the IQAMA in Saudi Arabia.

  • Health and Safety Violations:

Employers who disregard official health and safety rules or neglect to take appropriate measures to protect their workers will be liable to a fine ranging from SR1,500 ($400) to SR5,000 ($1,333). This penalty aims to ensure a secure and conducive working environment for all employees.

  • Insufficient Childcare Support:

Companies with over 50 workers are mandated to provide designated childcare places or nurseries. Failure to comply will result in a fine of SR5,000 ($1,333), underlining the importance of supporting working parents.

  • Hiring Minors:

The employment of children under the age of 15 is strictly prohibited. Employers found in violation will face a fine ranging from SR1,000 ($267) to SR2,000 ($533). This measure seeks to safeguard the rights and welfare of young individuals.

  • Postpartum Employment of Women:

Employing women within the first six weeks after childbirth will incur a fine of SR1,000 ($267). This regulation aims to ensure the health and well-being of new mothers during a crucial recovery period.

  • Passport Withholding:

Employers who withhold their employees’ passports or residency permits will face a fine of SR1,000 ($267). This penalty underscores the significance of respecting personal and legal rights.

  • Failure to Pay Wages:

A fine of SR300 ($80) will be imposed on employers who fail to deposit employees’ salaries into the agreed accounts on the scheduled dates. This rule aims to prevent delayed or withheld payments.

  • Gender-Based Discrimination:

Companies that discriminate between male and female workers, whether in the workplace or recruitment advertisements, will face a substantial fine of SR3,000 ($800). This provision underscores the importance of gender equality within the workforce.

How CBD Can Assist

As a trusted corporate services provider in Saudi Arabia, we manage all your company formation, secondary registration requirements, and Saudization compliance requirements in Saudi Arabia. For more information or for support with a company set up in Saudi Arabia, Saudi Arabia visas or PRO services in Saudi Arabia, email or call/whatsapp +971 56 218 4695.

Authored by Waleed Alotaibi, Government Liaison Manager – KSA

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