Amendments to Saudi Arabia’s Labor Law, approved by the Council of Ministers on August 6, 2024, will officially come into effect in just 16 days, according to Okaz newspaper. These updates introduce significant changes aimed at improving the rights of workers and creating a balanced work environment for both employees and employers.
Highlights of the New Amendments
One of the major changes involves employment contracts for non-Saudi workers. These contracts must now be written and have a fixed duration. If no duration is specified, the contract will automatically be valid for one year from the employee’s start date. Additionally, when a contract expires but the work continues, it will be renewed automatically for the same duration.
For new hires, the trial period is capped at a maximum of 180 days. During this period, either the employer or the employee may terminate the contract. Employers are also now required to provide housing and transportation for workers or offer monetary compensation instead. For open-ended contracts, the notice period has been set at 60 days for employers and 30 days for employees.
Improved Rights and Benefits
The amendments also address overtime pay, maternity leave, and family leave. Employers must now pay overtime at 150% of the worker’s basic hourly wage, or, with the worker’s consent, provide paid leave as compensation. Female employees are entitled to 12 weeks of maternity leave, with an additional one-month paid leave if the child is born with a disability or illness requiring care. Workers are also granted three days of leave in the event of a sibling’s death.
Broader Goals and Legal Adjustments
Lawyer Abdullah Al-Kasb highlighted that the amendments include updates to 38 articles, the removal of 7 articles, and the introduction of 2 new ones. These changes aim to modernize labor relations, foster contractual stability, and support the goals of Vision 2030 by aligning labor laws with the needs of a growing economy. Other updates, such as clearer definitions for terms like “resignation” and improved grievance procedures, are designed to help employees protect their rights in disputes with employers.
These reforms are expected to create a healthier work environment, enhance the efficiency of the labor market, and encourage the growth of small and medium-sized businesses, ultimately leading to more job opportunities for Saudi citizens.