Labor Law

1. Introduction:

The Labor Law is the legal framework that governs the relationship between the employee and the employer in the Kingdom of Saudi Arabia. Its aim is to ensure a fair balance between both parties, protect rights, and establish a safe and equitable work environment.

The law was issued under Royal Decree No. (M/51) dated 23/08/1426H and has since been amended several times to keep pace with labor market developments and improve efficiency.

2. What is the Labor Law?

It is the law that regulates all matters related to employment contracts, the rights and obligations of employees and employers, working hours, leaves, termination of service, compensations, recruitment, and workplace conditions. It also governs the employment of both Saudi and non-Saudi workers.

The law applies to all private sector establishments and some semi-governmental entities unless otherwise stated.

3. Key Provisions Covered by the Law:

- Employment Contract: Specifies legal requirements for validity and the types of contracts (fixed-term, indefinite-term, part-time).

- Probation Period: Not to exceed 90 days, extendable by mutual agreement.

- Working Hours: 8 hours per day or 48 hours per week, reduced during Ramadan.

- Leaves:

Annual leave: No less than 21 days.

Sick leave and extended medical leave.

Marriage, bereavement, and paternity/maternity leaves.

Maternity leave for working mothers.

- Termination of Service: Covers lawful and unlawful termination, resignation, and contract expiration.

- End-of-Service Benefits: Entitlement depends on length of service and last wage.

4. Employment Requirements Under the Law:

- A written and signed employment contract.

- Clear definition of salary, allowances, and job responsibilities.

- Compliance with Saudization quotas (Nitaqat program).

- Valid work and residency permits for non-Saudi employees.

5. Authorities Responsible for Labor Matters:

- Ministry of Human Resources and Social Development (HRSD): Handles inspections, oversight, and labor dispute resolution.

- Labor Courts: Adjudicate unresolved labor disputes.

6. Violations and Penalties Under the Labor Law:

- Monetary fines.

- Warnings.

- Denial of bonuses.

- Delay in promotions.

- Suspension from work.

- Termination of employment.

7. Legal and Social Consequences of Labor Disputes:

- Impact on the establishment’s record with the Ministry.

- Difficulty in obtaining new visas or licenses for the employer or employee.

- Delayed disbursement of entitlements if no lawsuit is filed.

- Judgments may be registered in enforcement records in case of non-payment.

8. Our Legal Services in Labor Law Matters:

Our firm provides specialized legal services in labor matters for both employers and employees, including:

- Drafting and reviewing employment contracts and internal policies.

- Legal consultation regarding labor rights and obligations.

- Court representation in labor disputes.

- Filing claims for wages, allowances, or end-of-service benefits.

- Defense in wrongful termination or disciplinary action cases.

- Legal advisory for businesses to ensure compliance and avoid violations.

9. Legal Advice & Contact Invitation:

Labor disputes require in-depth understanding of the Labor Law and its frequent updates. Whether you're an employer seeking compliance or an employee pursuing your rights, early legal consultation ensures a clear and risk-free path forward.

📞 Our legal team is here to assist you. Contact us now to schedule a consultation specialized in Labor Law.