Amendments to the Kingdom of Saudi Arabia Labor Law – key changes for employers in the KSA for 2025

September 18, 2024

The Kingdom of Saudi Arabia Labor Law (KSA Labor Law) was enacted by Royal Decree (M/51), dated 23/08/1426 H, corresponding to 27/09/2005 G. Recent amendments to the KSA Labor Law have been proposed by on 02/02/1446 H corresponding to 06/08/2024 G, and these amendments are set to take effect 180 days from publication in the official Gazette, in February 2025.

The amendments introduce several significant changes to the KSA Labor Law with the Implementing Regulations to the KSA Labor Law yet to be released. Key updates so far include additional definitions, expanded employer responsibilities, enhanced worker protections, and new regulations governing specific employment aspects. The amendments cover a broader range of employment activities, including outsourcing. Worker rights are more detailed in the amendments including worker rights with respect to resignation, grievance procedures, leave entitlements in addition to contract terms, working conditions and training. Additionally, the amendments introduce a new framework for maritime employment contracts. Further clarifications are expected upon the release of the Implementing Regulations.

This note aims to provide an overview comparing a selection of the latest amendments to the KSA Labor Law with the current provisions in force. The comparison in the table below is categorised by type: addition, deletion, or other amendment using colour codes for clarity.

Article no.	Article before amendment	Article after amendment	Type of amendment	Comments
35	The Ministry may decline to renew the work permit if the employer violates the Saudization requirements set by the Ministry.	The Ministry, for reasons it deems appropriate, may decline renewing a work permit if the employer violates the Saudization criteria set by the Ministry or any other conditions or regulations stipulated in the Regulations. The Regulations will set out the procedures to ensure that the worker is not adversely affected by the non-renewal of the work permit, including the possibility of transferring the worker's services to another employer without the consent of the non-compliant employer.	Addition	The amendment allows the Ministry to decline to renew a work permit if the employer violates any conditions stipulated in the Regulations, not just the Saudization requirements. The amendment adds a new provision explaining that the Regulations shall regulate non-renewal procedures.
37	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 to be the duration of the contract.	The employment contract for non-Saudis shall be written and of a fixed term. If the contract does not specify the term thereof, the term of the contract shall be deemed to be one year from the date on which the worker actually assumes the job duties. Where the worker's work continues after this term, the contract will be deemed automatically renewed for a similar term.	Other amendment	The original text states that if the contract does not specify the duration, the duration of the work permit shall be deemed to be the duration of the contract. The amended text changes this to state that if the contract does not specify the term, the term of the contract shall be deemed to be one year from the date on which the worker actually assumes the job duties. If the worker's work continues after this term, the contract will be deemed automatically renewed for a similar term.
39	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. The Ministry of hall inspect firms, investigate violations of this paragraph detected by its inspectors, and refer them to the Ministry of Interior for the imposition of prescribed penalties; An employer may not allow a worker to work for his own account and a worker may not work for his own account. The Ministry of Interior shall be in charge of detection, detention, deportation, and imposition of penalties on violators working for their own account in streets and squares, as well as absconding workers and persons employing, hiding, or transporting them as well as any person involved in such violation, and shall impose the prescribed penalties against them.	Unless he has followed the stipulated legal rules and procedures, an employer may not allow his worker to work for others or for his own account, and a worker may not work for other employers for his own account. Similarly, an employer may not employ the workers of other employers. The Ministry shall inspect firms, investigate violations of this Law, and - in respect of violations that fall under the mandate of the Ministry of Interior - shall refer these violations to the Ministry of Interior for the imposition of prescribed penalties. Further, the Ministry of Interior, in case of detecting violations related to its own regulations, shall refer the details of the employers in violation of this Article to the Ministry of Human Resources and Social Development for the application of the penalties prescribed under this Law.	Addition	The amendment introduces a new provision requiring the Ministry of Interior to refer details of employers violating its regulations to the Ministry of Human Resources and Social Development for the imposition of penalties as prescribed by this Law
42	An employer shall be required to prepare his Saudi workers and enhance their technical, administrative, vocational, and other skills for the purpose of gradually replacing non-Saudis. The employer shall keep a record showing the names of the Saudi workers who have replaced non-Saudis in accordance with the conditions and rules set forth in the Regulations.	An employer shall be required to develop a policy to train and qualify his Saudi workers, in order to enhance their skills and improve their level in technical, administrative, vocational and other works. The Regulations shall determine the relevant provisions in this regard.	Other amendment	The original text required the employer to "prepare" his Saudi workers and enhance their skills for the purpose of gradually replacing non-Saudis. The amended text changes this to require the employer to "develop a policy to train and qualify" his Saudi workers, which implies a more structured and planned approach to enhancing their skills. The original text stated that the employer shall keep a record showing the names of the Saudi workers who have replaced non-Saudis in accordance with the conditions and rules set forth in the Regulations. The amended text removes this requirement and instead states that the Regulations shall determine the relevant provisions in this regard, which suggests that the specifics of how this policy is to be implemented will be outlined in the Regulations.
43	Without prejudice to the conditions set forth in franchise and other agreements regarding training and qualification, every employer employing 50 or more workers shall annually train, in his business, a number of his Saudi workers not less than 12% of the total number of his workers. This percentage shall include Saudi workers who are pursuing their studies if the employer is covering their tuition fees. The Minister may raise this percentage in certain firms pursuant to a decision by him.	Without prejudice to the conditions set forth in franchise and other agreements regarding training, qualification and skills enhancement, every employer shall train and qualify, in his business, a number of his Saudi workers according to the percentage determined by the Minister's decision. This percentage shall include Saudi workers who are pursuing their studies if the employer is covering their tuition fees. The Regulations shall determine the criteria and general provisions in this regard.	Other amendment	Regarding the training of employees, the amended text removes the specific percentage and the condition of employing 50 or more workers, and instead states that every employer shall train and qualify a number of his Saudi workers according to the percentage determined by the Minister's decision. The original text stated that the Minister may raise this percentage in certain firms pursuant to a decision by him. The amended text removes this provision and instead states that the Regulations shall determine the criteria and general provisions in this regard, which suggests that the specifics of how this policy is to be implemented will be outlined in the Regulations.
51	The employment contract shall be executed in duplicate, one copy to be retained by each of the two parties. However, a contract shall be deemed to exist even if not written. In this case the worker alone may establish the contract and his entitlements arising therefrom by all methods of proof. Either party may at any time demand that the contract be in writing. As for workers of the government and public corporations, the appointment decision or order issued by the competent authority shall serve as the contract.	The employment contract shall be executed in duplicate, one copy to be retained by each of the two parties, and the contract must be attested according to the relevant statutory provisions and in light of the provisions of the Regulations. Moreover, a contract shall be deemed to exist even if not written. In this case the worker alone may establish the contract and his entitlements arising therefrom by all methods of proof. Either party may at any time demand that the contract be reduced to writing. As for workers of the government and public corporations, the appointment decision or order issued by the competent authority shall serve as a contract.	Addition	The amended text requires employment contracts to be attested in accordance with applicable laws and regulations, ensuring legal validity.
52	Subject to the provisions of Article 37 of this Law, the Ministry shall create a model employment contract, which shall primarily include: the name and place of the employer; the name and nationality of the worker; proof of identity; place of residence; agreed upon wage, including benefits and allowances; type and location of work; date of employment; and duration of the contract if fixed; The employment contract shall be in accordance with the model contract referred to in paragraph (1) of this Article. The parties to the contract may add other clauses not conflicting with the provisions of this Law, its Regulations and relevant decisions.	Subject to the provisions of Article 37 of this Law, the Ministry shall create a model form for each type of employment contract, which shall primarily include: the name and place of the employer; the name and nationality of the worker; proof of identity; place of residence; agreed upon wage, including benefits and allowances; type and location of work; date of employment; duration of the contract if fixed; and each party's basic rights and obligations; The employment contract shall be in accordance with the model form referred to in paragraph (1) of this Article. The parties to the contract may add other clauses not conflicting with the provisions of this Law, its Regulations, and relevant decisions issued hereunder.	Addition	The original text stated that the Ministry would create a model employment contract. The amended text changes this to state that the Ministry will create a model form for each type of employment contract. This suggests that there will be different model forms for different types of employment contracts, allowing for more specificity and relevance to the particular type of employment. The original text listed the details that the model contract would primarily include. The amended text adds "each party's basic rights and obligations" to this list.
53	If the worker is subject to a probation period, the same shall be expressly stated and clearly indicated in the work contract, provided that such probation period shall not exceed 90 days, exclusive of Eid Al-Fitr and Eid Al-Adha holidays and sick leaves. The probation period may be extended by written agreement between the worker and the employer, provided that it shall not exceed 180 days. Each party shall have the right to terminate the contract during this period, unless the contract contains a provision giving the right to terminate the contract to only one of them.	If the worker is subject to a probation period, the same shall be expressly stated and clearly indicated in the work contract, provided that such probation period shall not exceed 180 days. The Regulations shall set out the provisions related to the probation period, including matters related to leaves that are not included in the calculation of probation period. Each party shall be entitled to terminate the contract during this period.	Other amendment	The amended text states that the probation period shall not exceed 180 days outright, removing the need for a written agreement to extend the original 90- day period. The original text specifically excluded Eid Al-Fitr and Eid Al-Adha holidays and sick leaves from the calculation of the probation period. The amended text removes this specific exclusion and instead states that the Regulations will set out the provisions related to the probation period, including matters related to leaves that are not included in the calculation of the probation period. This provides more flexibility to determine which types of leave are excluded from the calculation of the probation period.
72	The worker shall be notified in writing of the decision of imposing the penalty is imposed on him. If he refuses to receive the same or if he is absent, the notice shall be sent to the address shown in his file by registered mail. The worker may object to the decision of imposing the penalty upon him within 15 days, excluding official holidays, from the date of notifying him of the final decision. The objection shall be filed with the labor court which shall be required to issue its decision within 30 days from the date of registering the objection.	The worker shall be notified in writing of the decision whereby a penalty is imposed on him. If he refuses to receive the same or if he is absent, the notice shall be sent to the address shown in his file by registered mail. The worker may file a grievance in writing against the decision imposing the penalty upon him within 30 days, excluding official holidays, from the date of being notified. If the worker's grievance is rejected or no written decision with respect thereto is issued within 15 days from the filing thereof, the worker may object to the penalty decision before the labor courts within 30 days, excluding official holidays, from the date of rejecting his grievance or expiry of the period scheduled for a decision on such grievance, whichever occurs first.	Other amendment	If the grievance is rejected or not responded to within 15 days, the worker can then object to the penalty decision before the labor court within 30 days.
74	An employment contract shall terminate in any of the following cases: If both parties agree to terminate it, provided that the worker's consent is in writing. If the term specified in the contract expires, unless the contract has been explicitly renewed in accordance with the provisions of this Law. In such case, it shall remain in force until the expiry of its term. At the discretion of either party in indefinite term contracts, as stated in Article 75 of this Law. When the worker reaches the age of retirement in accordance with the provisions of the Social Insurance Law, unless the parties agree on continuing work after this age. Force majeure. Permanent closure of the firm. Termination of the line of business for which the worker is employed, unless agreed otherwise. Any other case provided for by any other law.	An employment contract shall terminate in any of the following cases: If both parties agree to terminate it, provided that the worker's consent is in writing. If the term specified in the contract expires, unless the contract has been explicitly renewed in accordance with the provisions of this Law. In such case, it shall remain in force until the expiry of the term thereof. At the discretion of either party in indefinite term contracts, as stated in Article 75 of this Law. (bis) resignation by the worker When the worker reaches the age of retirement in accordance with the provisions of the Social Insurance Law, unless the parties agree on continuing work after this age. Force majeure. Permanent closure of the firm. Termination of the line of business for which the worker is recruited, unless agreed otherwise. (bis) Issuance of a decision or final judgment by the competent court to terminate the worker's contract in any of the bankruptcy proceedings initiated in accordance with the KSA Bankruptcy Law. Any other case provided for by any other law.	Addition	An addition to clause 3 which states that an employment contract can be terminated if the worker resigns. The change of the term "employed" to "recruited" in clause 7. 3. Clause 7 is amended to include termination of the employment contract upon issuance of a final court order in bankruptcy proceedings.
75	If the contract is of an indefinite term, either party may terminate it for a valid reason to be specified in a written notice served to the other party prior to the termination date as specified in the contract, provided that such period is not less than 60 days if the worker's wage is paid monthly, and not less than 30 days for non-monthly wages.	If the contract is of an indefinite term, and the wage is paid on monthly basis, either party may terminate it for a valid reason as follows: a. If the termination is initiated by the worker, he shall provide written notice to the employer at least 30 days prior to the termination date. b. If the termination is initiated by the employer, he shall provide written notice to the worker at least 60 days prior to the termination date. If the contract is of an indefinite period and the wage is not paid on a monthly basis, the party intending to terminate the contract for a legitimate reason-whether the worker or the employer-shall serve the other party a written notice at least thirty (30) days prior to the termination date.	Other amendment	Amending the notice period for indefinite contracts that are terminated by the employee. Whereas the notice period shall be 30 days instead of 60 days.
79		A resignation application shall be considered accepted if 30 days pass without a response from the employer. The employer shall have the right to postpone the acceptance of the resignation for a period not exceeding 60 days if the interests of the work so require, provided that a written explanation of the postponement justifications is given to the worker. This postponement in acceptance must occur before the expiry of the 30-day period mentioned in this paragraph. The postponement period will be calculated from the date the explanation is provided to the worker. An employment contract shall terminate upon resignation either on the date the employer accepts the resignation or after the expiration of the 30-day period mentioned in paragraph (1) of this Article without a response from the employer, or after the expiration of the postponement period mentioned in paragraph (1) of this Article. The worker may withdraw the resignation application within a period not exceeding seven days from the date of submission thereof, unless the employer has already accepted it before the withdrawal. A deferred date may not be specified in a resignation application. The employment contract shall remain valid during the period of the resignation application, and both parties to the contract must fulfil all obligations arising therefrom during that time. A worker whose contract terminates by resignation shall be entitled to all the rights prescribed under this Law.	Addition	New article regulating resignation of employees.
107	The employer shall pay the worker for overtime working hours an additional amount equal to the hourly wage plus 50% of his basic wage. If the firm is operated on the basis of weekly working hours, the hours in excess of the hours taken as the criterion shall be deemed overtime hours. 3. All working hours performed during holidays and Eids shall be deemed overtime hours.	The employer shall pay the worker for overtime working hours an additional amount equal to the hourly wage plus 50% of his basic wage. The employer may, with the worker's consent, grant the employee compensatory paid leave days in lieu of the wages due for overtime hours worked. The Regulations will specify the related provisions. If the firm is operated on the basis of weekly working hours, the hours in excess of the hours taken as the criterion shall be deemed overtime hours. All working hours performed during holidays and Eids shall be deemed overtime hours.	Addition	The clause is amended to permit employers, with worker consent, to grant compensatory paid leave in lieu of overtime wages, with specific details outlined in the Regulations.
113	Taking into account female workers' leaves as provided for under this Law, a worker shall be entitled to a five-day leave with full pay in the event of the death of a spouse or an ascendant or descendant, or marriage, and a three-day paid leave in the case of childbirth. In all cases, the employer shall have the right to request supporting documents.	With due consideration to the female workers' leaves set forth in this Law, a worker shall be entitled to a five-day leave with full pay in the event of their marriage, or the death of a spouse or an ascendant or descendant, and three-day leave with full pay in the event of death of their brother or sister, all of which shall be calculated from the date of occurrence of such event. A worker shall be entitled to a three-day paid leave in the case of having new child born, to be taken within seven days of the childbirth date. In all events, the employer shall have the right to request documents supporting each such event.	Addition	The amendment adds a provision for a three-day leave with full pay in the event of the death of a brother or sister of the worker. Leave due to childbirth now must be taken within seven days of the childbirth date.
151	Female workers shall be entitled to fully paid maternity leave for a period of 10 weeks to be divided at the female worker's discretion. Such period may start four weeks prior to the expected date of delivery. Expected date of delivery shall be determined pursuant to a medical report certified by a health authority; A woman may not, under any circumstances, work during the six weeks immediately following delivery. She shall be entitled to extend the leave for an additional month as unpaid leave; In the event of giving birth to a sick child or a child with special needs whose health condition requires a constant companion, a female worker shall be entitled to a one-month leave with full pay starting at the end of the maternity leave and she shall be entitled to extend the leave for an additional month as unpaid leave.	Female workers shall be entitled to fully paid maternity leave for a period of 12 weeks, of which the six weeks following the delivery shall be obligatory, while the remaining six weeks of the maternity leave will be divided at the female worker's discretion. Such leave may start four weeks prior to the expected date of delivery. Expected date of delivery shall be determined pursuant to a medical report certified by a health authority. If the remaining leave duration is less than six weeks due to a delay in the expected date of delivery, the additional period required will be considered as unpaid leave. In all cases, the female worker shall have the right to extend this leave by one month without pay; In the event of giving birth to a sick child or a child with special needs whose health condition requires a constant companion, a female worker shall be entitled to a one-month leave with full pay starting at the end of the maternity leave and she shall be entitled to extend the leave for an additional month as unpaid leave.	Other amendment	Extending maternity leave from 10 weeks to 12 weeks

The above summary demonstrates the needs for Employers in the KSA to now update their employment contracts and handbooks, as well as policies and procedures in line with the new requirements. Some of the key recommendations are listed below.

Article no.	Amendment	Effect on employers	Recommendation
35	The Ministry has the authority to deny work permit renewals not only for violations of Saudization requirements but also for any other breaches of labor regulations.	Employers must ensure strict compliance with all labor regulations, including Saudization requirements.	Review and update policies and procedures to ensure compliance with Saudization quotas and other labor laws.
37	Prior to the amendment, if an employment contract of a non-Saudi employee does not specify the duration, the duration of the work permit shall be deemed to be the duration of the contract. The amendment changes this to stipulate that if the contract does not specify the term, the term of the contract shall be deemed to be one year from the date on which the worker actually assumes the job duties. If the worker's work continues after this term, the contract will be deemed automatically renewed for a similar term.	Employers must explicitly specify the duration of employment contracts for non-Saudi employees. If not specified, the contract will be deemed for one year.	Review and update all existing employment contracts to include a clear duration.
42	The employer's responsibility has shifted from simply "preparing" Saudi workers to developing a comprehensive "training and qualification" policy. This implies a more strategic approach to skill development.	Employers must develop a comprehensive training and qualification policy to ensure Saudi workers are adequately skilled.	Develop a strategic training plan that addresses the specific needs of Saudi employees.
43	The law now allows the Minister to set any percentage of Saudi workers that employers must train, removing the previous fixed percentage and the requirement for a minimum number of employees. Specific criteria and rules for determining training quotas will be outlined in future regulations, rather than being directly stated in the law.	Employers must comply with the training quotas set by the Minister, which will be outlined in future regulations.	Monitor and adjust training programmes to meet the required quotas.
46, 48 & 51	The amendments aim to provide more structure, validity, and clarity to training contracts, focusing on clear objectives, defined roles, and performance-based evaluation.	Training contracts must be more structured, valid, and clear, with defined objectives, roles, and performance evaluation.	Develop new or revise existing training contracts to ensure they meet the new requirements.
52	The Ministry will create a model form for each type of employment contract.	Employers can use the model forms provided by the Ministry for different types of employment contracts.	Become familiar with the model forms and adopt them as needed.
75	The period for indefinite contracts that are terminated by the employee shall be 30 days instead of 60 days.	The reduction of the notice period for indefinite contracts terminated by the employee from 60 to 30 days allows employers to adjust their termination policies accordingly.	Revise termination policies if needed.
79	New article regulating resignation of employees.	Employers must comply with the new regulations regarding employee resignation.	Review and update policies related to employee resignation to ensure compliance with the updates.
107	Employers may, with worker consent, grant compensatory paid leave in lieu of overtime wages, with specific details outlined in the Regulations.	Employers can grant compensatory paid leave in lieu of overtime wages, with specific conditions.	Develop a policy outlining the conditions and procedures for granting compensatory leave, if required.
113	A new three-day leave with full pay in the event of the death of a brother or sister of the worker.	Employers must provide a three-day leave with full pay in the event of the death of a brother or sister of the worker.	Update leave policies to include this new leave.
151	Extending maternity leave from 10 weeks to 12 weeks. The extension of maternity leave from 10 weeks to 12 weeks obliges employers to update their leave policies to comply with this change.	Employers must extend maternity leave to 12 weeks.	Update leave policies and procedures to reflect the extended maternity leave.

For more detailed guidance on the remainder of their changes, and the new requirements for your company in KSA further please contact our KSA Employment team on: [email protected].

Also see the Dentons Global Quarterly Employment review here for quarterly updates on KSA employment and law.

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