Considering the diversity of nationalities employed in Saudi Arabia, as well as the unique transformational economy and social reform blueprint that is opening Saudi Arabia up to the global market, there was a critical need for a solid foundation of human resources from different countries and with different specialties, in order to launch the ambitious vision. As a result, Saudi Labor Law regulations for expatriates were instituted.
Saudi labor law for expatriates: Recruitment terms
- Recruitment of an expatriate employee can only take place via an approval of the Ministry.
- A non-Saudi isn’t allowed to engage in any work only after obtaining a work permit from the Ministry. The conditions for granting the permit are as follows:
1. The worker has lawfully entered the country and is authorized to work.
2. The worker possesses the professional or academic qualifications which the country needs and which are not possessed by citizens or the available number of such citizens is insufficient to meet the needs, or that he belongs to the class of ordinary workers that the country needs.
3. The worker has a contract with an employer and is under his responsibility.
- The employment contract for non-Saudis shall be written and of a fixed term. If the contract does not specify the duration, the duration of the work permit shall be deemed the duration of the contract.
- An employer may not employ a worker in a profession other than the one specified in his work permit.
- A worker is prohibited from engaging in a profession other than his before taking the legal measures necessary to change his profession.
- Unless he has followed the stipulated legal rules and procedures, an employer may not allow his worker to work for others, and a worker may not work for other employers. Similarly, an employer may not employ the workers of other employers.
- An employer may not allow a worker to work for his own account and a worker may not work for his own account.
Rights and duties: Employer and employee
1. An employer shall bear the fees for:
- Pertaining to the recruitment of non-Saudi workers.
- Issuing and renewing residence permit (Iqama) and work permit.
- Fines resulting from their delay.
- Fees pertaining to change of profession.
- Exit and re-entry visas.
- The return tickets to the worker’s home country at the end of the relation between the two parties.
- The fees of transferring the services of a worker who wishes to transfer his service to him.
2. A worker shall bear the costs of returning to his home country if he is unfit for work or if he wishes to return to his home country without a legitimate reason.
3. An employer shall be responsible for the cost of preparing the body of a deceased worker and transporting it to the location where the contract was concluded, or where the worker was recruited unless the worker is interred in the Kingdom with the approval of his family. The employer shall be relieved if the General Organization for Social Insurance (GOSI) undertakes the same.
A table of the top 10 penalties for employers violating labor law in regard to expatriate employees
| No. | Description of Violation | Category (C)Establishmenthaving 10 workers orless | Category (B)Establishmenthaving 1 – 50workers | Category (A)Establishmenthaving 51 workers ormore |
| 1 | Selling work visas or Mediating the sale of work visas | 20,000Per each visa | 20,000Per each visa | 20,000Per each visa |
| 2 | The employer employs non-Saudiworker without obtaining any work permit or Ajeer Notification | 10,000Per one worker | 20,000Per one worker | 20,000Per one worker |
| 3 | The employer enables the worker to work in another job, other such listed in the work permit or employment contract | 2,500Per one worker | 5,000Per one worker | 10,000Per one worker |
| 4 | Keep the worker’s passport orresidence permit for the worker and his family members | 5,000Per one worker | 5,000Per one worker | 5,000Per one worker |
| 5 | The employer’s non-compliance with paying fees or costs, and charging them to the worker | 10,000Per one worker | 10,000Per one worker | 10,000Per one worker |
| 6 | Non-payment of workers’ wages and dues in the official currency of the country on its due times into their approved bank accounts, orwithholding the worker’s wages orpart of them without a judicial basis | 2,000Per one worker | 3,000Per one worker | 5,000Per one worker |
| 7 | The employer’s non-compliance with submitting the wages protection file on a monthly basis, or non-compliance when submitting the file monthlywith the compliance rate specified by the Ministry | 5,000 | 10,000 | 15,000 |
| 8 | Non-provision of weekly rests legally approved or agreed upon in the employment contract, the working hours shall not be more than that provided in the Article No. (98) without an assignment of overtime or non- compliance with the daily rest periods granted to the worker. | 5,000Per one worker | 5,000Per one worker | 5,000Per one worker |
| 9 | The establishment’s non- compliance with the legally prescribed vacations for workers | 5,000Per one worker | 5,000Per one worker | 5,000Per one worker |
| 10 | The employer’s failure to register the workers in the remote work system in the relevant porta | 1,000Per one worker | 1,000Per one worker | 1,000Per one worker |
Download the complete table of penalties on violating Saudi labor law. Here
3 significant updates on Saudi labor law for expatriates:
- Decision for the Ministry of Human Resources and Social Development to manage the contractual relationship between the establishment and the worker (Saudi/ Expatriate) 75506
Establishments shall authenticate the contracts of their workers via Qiwa Platform, from registering the contract, updating the details of professions, wages and qualifications to the end or termination of the contractual relationship.
- Establishments shall register their employees to the Wages Protection System, QIWA, and MUDAD.
The WPS is an electronic system used in Saudi Arabia to create a database of salary payments of workers in the private sector. Private sector companies must register on the WPS regardless of their size.
And to facilitate that purpose, the government introduced the Mudad system, a digital platform to assist with wage payments compliance and regulation. Mudad makes the transferring of salaries easy through a direct link with the banks and automatic uploading of wages information to the WPS.
- Expats can freely switch employers. Aiming to increase employee mobility, an amendment on Saudi labor law for expatriates 2021 which took effect on 14 March, allowed foreign employees to leave their jobs without the consent of the employer upon the expiration of their employment contracts. They can leave their jobs prior to the expiration of the employment contract as long as the employee has been in the country for at least a year and has given 90 days’ notice to the employer.
In certain cases, foreign workers are allowed to change their jobs within the first year of employment. Besides, employees are now entitled to apply for and obtain exit/re-entry permits and the final exit permit by themselves without having to obtain permission from their employer.
Your Expert Partner for Labor Law Compliance & Workforce Solutions
Every small and middle business may need the assistance of a specialist partner to get the most benefits of the labor law, and avoid violations. Now SMASCO introduces its new service Rowad, to provide your business with the required workforce, and help you understand the Saudi labor law for expatriates 2021. Download Rowad app. Here
Sources
- Decision for the Ministry of Human Resources and Social Development to manage the contractual relationship between the establishment and the worker (Saudi/ Expatriate) 75506
- Labor Law, Bureau of Experts at The Council of Ministers, Kingdom of Saudi Arabia.
- Decision table of violations and corresponding penalties 92768, Publication date: 13 February 2023 – 22 Rajab 1444, Ministry of Human resources and Social Development of Saudi Arabia.
- Saudi Arabia: Labour Law, 14 December 2022 Rödl & Partner.
- What is a Mudad Payroll Management System? 10 Best Facts How it Works? March 22, 2023, HRmatters.
- Qiwa.sa/en/qiwa.
- Mudad.com.sa.
- Saudi Government Compliance, MOHR AR-Blog.