Saudi Arabia

Saudi Arabia

Capital: Riyadh
Currency: - SAR
SAR

Overview of Saudi Arabia Labor Law and Employment Policies

Employment Law Overview

  • Key Legislation:
    • Labor Law (2012)
    • Social Insurance Law (2016)
    • Occupational Hazards Insurance Law (2012)
  • Legal Characteristics:
    • Aims to protect employee rights and promote a fair employment environment.
    • Sets minimum standards for working hours, leave, wages, and severance pay.

Employment Contract Requirements

  • Contract Types:
    • Fixed-term contracts (up to 3 years)
    • Indefinite-term contracts
  • Contractual Provisions:
    • Must be written in Arabic.
    • Must include terms on job description, remuneration, working hours, leave, and severance pay.
  • Language and Currency:
    • Contracts must be in Arabic.
    • Salaries must be denominated in Saudi Riyals (SAR).

Working Hours Regulations

  • Standard Working Hours: 48 hours per week, 8 hours per day.
  • Rest Days and Breaks: 24-hour rest on Fridays, minimum 30-minute break per day.

Leave Policies

  • Annual Leave:
    • Less than 5 years of service: 21 days
    • Over 5 years of service: 30 days
  • Public Holidays: 9
  • Special Leaves:
    • Sick leave: 120 days per year, first 90 days paid.
    • Maternity leave: 10 weeks paid.
    • Paternity leave: 1 day paid.

Employee Termination and Contract Termination

  • Notice Period:
    • Indefinite-term contracts: 60 days' notice
    • Fixed-term contracts: 30 days' notice
  • Severance Pay:
    • 2 months' salary for each year of service.
  • Protection Against Unfair Dismissal:
    • Employees are entitled to compensation for unfair dismissal.

Tax Laws

  • Personal Income Tax: Saudi Arabia does not have personal income tax.
  • Social Insurance Contributions:
    • Employer: 12%
    • Employee: 0%

Health Insurance

  • Insurance Policy: Employers must provide supplementary health insurance for expatriate employees.
  • Coverage: Medical care and hospital treatment.

Compensation and Benefits

  • Minimum Wage: No mandatory minimum wage.
  • Salary Structure:
    • Basic salary
    • Allowances (housing, transportation, etc.)
    • Bonuses

Work Permits and Visas

  • Permit Requirements: Expatriate employees require a work permit and a residence visa.
  • Application Process:
    • Employer applies for work permit from the Ministry of Labor.
    • Employee applies for residence visa from Saudi embassy or consulate abroad.

Confidentiality and Non-Compete Clauses

  • Enforceability: Confidentiality and non-compete clauses are enforceable in Saudi Arabia.
  • Common Provisions:
    • Confidentiality: Employees may not disclose the employer's confidential information.
    • Non-compete: Employees may not work for a competitor for a specified period.

Training and Development

  • Legal Requirements: No mandatory training requirements.
  • Government Support: Government provides training and development programs.

Workplace Diversity and Inclusion

  • Legal Requirements: Discrimination based on factors such as race, religion, or gender is prohibited.
  • Enforcement: Ministry of Labor is responsible for enforcing anti-discrimination laws.

Remote Work Policies

  • Legal Framework: Remote work is regulated in Saudi Arabia.
  • Tax and Insurance Implications: Tax and social insurance implications of remote work depend on specific circumstances.

Authoritative Website Addresses

1.Overview of Saudi Arabia Labor Law and Employment Policies
1.1Employment Law Overview
1.2Employment Contract Requirements
1.3Working Hours Regulations
1.4Leave Policies
1.5Employee Termination and Contract Termination
1.6Tax Laws
1.7Health Insurance
1.8Compensation and Benefits
1.9Work Permits and Visas
1.10Confidentiality and Non-Compete Clauses
1.11Training and Development
1.12Workplace Diversity and Inclusion
1.13Remote Work Policies
1.14Authoritative Website Addresses