Employer-employee interactions are governed by Saudi labor law in the Kingdom. The rights of workers in Saudi Arab are protected by its labor law. In this article, we are going to discuss important points about the Saudi Labor Law and also how HR Outsourcing can benefit your business to comply with these laws.
This blog particularly covers all the things to remember as expats in the Kingdom of Saudi Arab. Workers in the private sectors are governed by the Labor Law of the Kingdom of Saudi Arabia. The rights protected by the labor law are yours to receive even if you work for a private corporation. Companies who choose to have HR outsourcing in Saudi Arab keep themselves safe from the hassle of compliance of the Saudi labor law regardless being in private or public sector.
Here are some important points to remember:
What are the requirements to achieve a Work Visa in Saudi Arab?
Employees must have a sponsor in Saudi Arab in order to apply for a visa. While the majority of the application procedure falls under the responsibility of the sponsoring employer, the prospective employee is still required to provide all necessary documentation which is as follows:
- A valid passport for the duration of employment
- A colored passport sized photograph
- Proof of payment of visa fee
- Copy of complete visa application
- 3 copies of verified medical screening reports
- A signed copy of employment contract
- Certified letter of employment from the sponsoring company in Saudi Arab by the Ministry of Foreign Affairs and the Saudi Chamber of Commerce
- Police certificate
- Certified educational documents of the applicant validated by the Saudi Arabian Cultural Mission
- A pre-paid, addressed envelope
What is the process of work visa application according to Saudi Labor Law?
The application for a work visa must be made by the employer. The Saudi Arabian Ministry of Interior must have the supporting employer’s registration. The Ministry will create an immigration file for the employer that contains data on all of its foreign employees.
The Ministry of Labor in Saudi Arab will receive an application for a work visa from the employer. The Ministry of Labor will inform the Ministry of Foreign Affairs when the application is accepted after which the Ministry of Foreign Affairs will provide a Visa Authorization Number. This will take time of about two weeks.
What is an Employment Contract according to Saudi Labor Law and what must it include?
According to the Article (37) of the Labor Law, The Ministry of Labor issues a unified form for the work contract, which shall include, among other things, the name of the employer, venue, the employee’s name, nationality, identification documents, wage agreed upon including any benefits, residence, date of employment, and duration of the contract in case it is a fixed contract. The employment agreement for non-Saudis must be in writing and have a set duration. If the contract is vague on the period, the work permit’s term will be taken into consideration.
Is there a minimum wage in Saudi Labor Law?
There is no set minimum salary in Saudi Arabia. However, a Saudi employee’s monthly income must be at least SAR 4,000 in order for them to be included in the Nitaqat (Saudi employment nationalization program) points system. Payroll must be made to an eligible bank each month through the Wage Protection System. The rate of overtime pay is 150 percent of the standard hourly salary, as stated in Article 107 of the Labor Law. Overtime hours include all working hours clocked on holidays.
Who is liable to pay for the recruitment fees for applying or securing an employment offer by law in Saudi Arab?
The worker’s residence permit and work permit fees, as well as the recruitment expenses, must be covered by the company. According to Ministerial Order No. 178743 of 1440, if the employer charges the employee for expenses that the employer must cover, the latter is subject to a fine of SAR 10,000 per employee (2019).
What are the maximum and minimum working hours for employees according to Saudi Labor Law?
For private sector employees, eight hours per day or 48 hours per week are the maximum allowed working hours. For every five hours working, employees are allowed to 30-minute breaks for relaxation, prayer, and food. This rule is not always applicable. Working hours may be increased to nine hours per day, and in some circumstances, up to a maximum of 10 hours.
Muslims are only allowed to work 6 hours per day, or 36 hours per week, during the holy month of Ramadan.
In the summer, typically from 15 June through 15 September, it is not permitted to work outside between the hours of 12 and 3 save for oil and gas personnel. Infractions of this regulation can be reported using a special hotline.
What does the Saudi Labor Law state about leaves for employees?
As per the law, there are 6 categories of leaves for the employees in the contract which are:
- Annual Leave – After one year of employment, the notice period is 21 days; after five years with the same company, it is 30 days.
- Maternity Leave – Four weeks prior to the anticipated delivery date and six weeks following the delivery, plus an additional month without salary. Half of the income is acceptable as leave pay for employment of less than one year, and the whole salary is given for employment of three years or more.
- Paternity Leave – 3 days off for the father of newborn
- Medical Leave – First 30 days of sick leave are paid at full rate; the following 60 days are paid at 3/4 of rate; and the final 30 days of sick leave in a year are unpaid.
- Public Day-offs – Saudi National Day, Eid al-Fitr, and Eid al-Adha are fully paid holidays, and employees are entitled to overtime if they must work during those days.
- Other Type of Leave – This category includes:
(i) Death of Spouse or Children – There will be a 5 day leave policy. Depending on her faith, a female employee is entitled to 15–130 days of leave following the death of her spouse.
(i) Hajj – Once an employee has served for two years and has not previously performed Haj, they are eligible for a paid vacation of ten to fifteen days.
What are general violations and their corresponding fines related to employment in Saudi Arab as per the law?
Some of the offenses and associated punishments that pertain to expat workers include:
- Employer who does not use Arabic language in work agreements, data and records, employee records, or written directives to workers is liable to pay SAR 5000.
- Selling or serving as a broker for the purchase of work visas will end up with a fine of SAR 50,000 multiplied by the number of visas sold.
- The employee’s passport, Iqama, or family members’ health insurance if seized by the employer, the employer has to pay SAR 5000 multiplied by the number of employees.
- An Employer who hires a Non-Saudi worker without work permit has to pay a fine of SAR 20,000.
- Hiring Non-Saudi workers instead of Saudi workers on designated profession leads to a fine of SAR 20,000 per employee.
- Employer who fails to pay workers’ salaries on time, does so in an unofficial currency, or withholds earnings in full or in part without authorization is liable to pay SAR 3000.
- Employers failing to comply with the Saudi Wage Protection system will have to pay a fine of SAR 10,000 per employee.
Still have confusions regarding Saudi Labor Law? Here is how Payroll Middle East can help!
Payroll Middle East has its operations all over the Middle East, with the head office situated in Dubai, UAE. With a phenomenal team of professional lawyers, legal consultants, tax experts and payroll specialists, Payroll Middle East has facilitated over 150 businesses in Saudi Arab and other Middle Eastern countries. law experts in Saudi Arab can guide you with extensive know-hows for your business in Saudi Arab and how should you be managing your employees in the Kingdom without being worried about possible violations.
