In a significant move to modernize its labor market and align with Vision 2030 objectives, Saudi Arabia has enacted comprehensive amendments to its Labor Law, effective February 19, 2025. These reforms aim to enhance worker rights, improve job stability, and create a more attractive work environment.
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Expanded Leave Entitlements
Maternity Leave
The amendments extend maternity leave from 10 to 12 weeks with full pay. Employees must take at least six weeks post-delivery, while they may utilize the remaining six weeks before or after childbirth, offering greater flexibility to working mothers.
Paternity Leave
For the first time, fathers can take three days of paid paternity leave within seven days of their child’s birth. This initiative supports family bonding and acknowledges the father’s role in early childcare.
Bereavement Leave
“Employees now receive three days of paid leave upon the death of a sibling, expanding the scope of compassionate leave to support workers during personal losses.
Probationary Period Adjustments
The maximum probationary period has been increased to 180 days, up from the previous 90 days. This change allows employers more time to assess a new hire’s suitability for the role. The employment contract must clearly state the duration of the probation to ensure transparency.
Resignation Procedures
The term ‘resignation’ now formally defines a written declaration by an employee to terminate their contract without coercion. Employers must respond to a resignation notice within 30 days; failure to do so results in automatic acceptance. Employers may delay acceptance for up to 60 days if business operations necessitate. Additionally, employees may withdraw their resignation within seven days, as long as it hasn’t been accepted yet.
Contract Termination Notice Periods
For indefinite contracts, the notice period has been standardized:
- Employee-Initiated Termination: 30-day notice required.
- Employer-Initiated Termination: 60-day notice required.
This adjustment aims to balance the interests of both parties and provide adequate time for transition.
Saudi Arabia Labor Law: Equal Opportunity Mandate
Employers are now explicitly required to ensure equal treatment for all employees. This includes fair access to professional opportunities and benefits, irrespective of race, color, gender, age, disability, marital status, or any other form of discrimination. This mandate promotes inclusivity and diversity in the workplace.
Training and Development Obligations
To foster a skilled workforce, employers must establish training and qualification policies aimed at enhancing employee performance. This initiative aligns with the broader goals of Vision 2030, focusing on economic diversification and the development of human capital.
Overtime Compensation Options
The amendments introduce flexibility in compensating overtime work. Employers can now offer compensatory leave as an alternative to monetary overtime pay, subject to the employee’s agreement. This provides employees with options that best suit their personal needs and circumstances.
Accommodation and Transportation Provisions
Employers must provide suitable accommodation and transportation or equivalent allowances as part of the employment package. This policy meets employees’ basic needs, contributing to their overall well-being and job satisfaction.
Penalties for Unlicensed Recruitment Activities
To regulate the labor market, companies engaging in manpower supply without the necessary licenses from the Ministry of Human Resources and Social Development (MHRSD) face substantial penalties ranging from SAR 200,000 to SAR 500,000. This measure aims to curb unauthorized recruitment practices and protect worker rights.
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