With the constant evolution of the work environment, the Saudi government strives to create a fair and supportive workplace that attracts talent, empowers women, and fosters entrepreneurship. The labor system in Saudi Arabia is a cornerstone of this transformation, featuring laws and regulations aimed at safeguarding employee rights, organizing the employer-employee relationship, and achieving a balance between the two parties. Through regular updates and innovative amendments, the system aims to keep pace with economic and social changes, enhancing the Saudi labor market's global competitiveness to attract skilled professionals and ensure fairness for workers. In this article, we explain the labor system concepts and highlight key provisions.
Concept of the Saudi Labor System
The Saudi labor system is a set of laws and regulations defining the rights and obligations of workers and employers. It covers various aspects of labor relations, including:
Employee Rights: Covers wages, whether basic or actual, vacations, social security, and end-of-service benefits.
Employee Duties: Includes fulfilling assigned tasks, adhering to company regulations, and safeguarding company property.
Employment Contract: A contract between an employer and an employee in which the latter agrees to work under the employer's management or supervision in return for wages.
Employer Definition: A person who works for the benefit of an employer and under their management or supervision, even if not directly under their sight.
To Whom Does the Saudi Labor System Apply?
According to Article 5 of the Saudi Labor Law, the system applies to:
1.Any contract where a person commits to work for the benefit of an employer under their management or supervision in return for wages.
2.Government workers, public authorities, and institutions, including those in grazing or agriculture.
3.Workers of charitable institutions.
4.Workers in agricultural and pastoral establishments employing ten or more workers.
5.Workers in agricultural establishments that manufacture their products.
6.Workers who permanently operate or repair mechanical equipment for agriculture.
7.Training and qualification contracts with individuals who are not employees of the employer, as specified within the law's special provisions.
8.Part-time workers concerning occupational safety, health, work injuries, and ministerial decisions.
9.Exceptions to the Labor Law
The following are exempted from the provisions of this system:
1.Members of the employer's family, including spouses, ancestors, and descendants, working in an establishment that employs only them.
2.Domestic workers and their equivalents.
3.Maritime workers on ships with a load capacity of less than 500 tons.
4.Agricultural workers not falling within the categories stated in Article 5 of the law.
5.Non-Saudi workers hired for a specific task with a duration not exceeding two months.
6.Sports club and federation athletes and their coaches.
The Ministry coordinates with relevant authorities to establish specific regulations governing domestic workers and their equivalents, defining the rights and obligations of both parties, and submits these for Cabinet approval.
Working Hours Under the Saudi Labor Law
A worker cannot be required to work more than eight actual hours per day if the employer follows a daily standard, or more than 48 hours per week if a weekly
standard applies. Working hours are reduced during the month of Ramadan for Muslim employees to no more than six hours per day or 36 hours per week.
Working hours may extend to nine hours per day for some types of workers or in specific industries where continuous work is not typical.
Conversely, hours may be reduced to seven hours per day for certain types of workers or in hazardous or harmful industries.
Workers may not work more than five consecutive hours without a break for rest, prayer, or meals of no less than 30 minutes per break, ensuring that a worker does not remain at the workplace for more than 11 hours in a day.
Break times for rest, prayer, and meals are not counted as actual working hours, and workers are not under the employer's authority during these times. The employer cannot require the worker to stay in the workplace during these periods.
Read also: Types and Importance of legal consultations
Wages Under the Saudi Labor Law
According to Article 90 of the Labor Law regarding wages:
1.Wages and any other entitlements owed to the worker must be paid in the national currency during working hours and at the workplace, as specified by the following:
Daily-paid workers are paid at least once a week.
Monthly-paid workers are paid once a month.
For piecework, where the task takes more than two weeks, the worker is entitled to receive a weekly advance based on the completed portion, with the remainder paid the week following task completion.
In other cases, workers are paid at least once a week.
2.Wages may be paid through approved banks in the Kingdom if the worker consents, provided that payment timelines do not exceed those outlined above.
No deductions may be made from the worker's wages without written consent, except in the following cases:
Repayment of loans from the employer, not exceeding 10% of the worker's wage.
Social insurance contributions and other system-imposed contributions.
Worker’s contributions to savings funds and loan repayments to the fund.
Installments for employer-initiated projects intended to provide housing or other benefits.
Fines for worker infractions or compensation for damages.
Debt repayment enforced by a court order, with deductions capped at a quarter of the worker's monthly wage unless otherwise specified by the court order.
Priority for debt collection is given to alimony, followed by food, clothing, and housing before other debts.
Employment Contract
An employment contract is an agreement between an employer and an employee, whereby the employee agrees to work under the employer's direction or supervision for remuneration. The contract must be written in duplicate, with each party retaining a copy.
Types of Employment Contracts
1.Fixed-term contract
2.Open-ended contract
3.Seasonal contract
4.Temporary contract
5.Contract for a specific task
6.Part-time contract
7.Flexible work contract
8.Training and qualification contract
9.Remote work contract
Role of the Ministry of Human Resources and Social Development
The Ministry of Human Resources and Social Development plays a crucial role in regulating the Saudi labor market. It enforces labor laws, monitors compliance, and ensures that companies provide a work environment meeting set standards.
Through this, the Saudi labor system offers a comprehensive framework for regulating the labor market and ensuring the rights and obligations of all parties, forming a foundation for a strong, sustainable Saudi economy.
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