Saudi Arabia Labor Laws Archives - Yaqoot Manpower Services

04Jul

The Complete Guide to Saudi Labour Law Updates 2025 for Employers and Employees

Saudi Arabia’s labor market is transforming rapidly in 2025 with the introduction of key updates to the Kingdom’s labour law framework. These reforms, driven by Vision 2030 and overseen by the Ministry of Human Resources and Social Development (MHRSD), aim to build a fairer, more efficient, and business-friendly work environment for both employers and employees.

Whether you’re a business owner, HR manager, or job seeker, staying informed of these changes is critical for remaining compliant and competitive in today’s evolving Saudi workforce.

At Yaqoot Manpower Services, we have distilled the most important updates and provided practical insights to help organizations navigate them confidently — based on trusted industry knowledge and official guidance.

Why Labour Law Reforms Matter in 2025?

Labour law updates in Saudi Arabia are not merely administrative shifts; they are part of a larger effort to:

Increase private sector participation
Improve worker protections and rights
Simplify contract processes
Digitize employment relationships
Align with global labor standards

These changes also reflect the Kingdom’s push to attract foreign investment and reduce its reliance on public sector jobs by encouraging private employment and entrepreneurship.

Key Saudi Labour Law Changes in 2025

Below is a breakdown of the most relevant labour law updates employers and employees need to know:

1. Resignation and Acceptance Timelines

In 2025, resignation procedures have been clarified to reduce disputes and delays:

When an employee submits a resignation, the employer must respond within 30 days.
If there’s no formal response, the resignation is considered automatically accepted.
Employees have the right to withdraw their resignation within 7 days of submission.

This change enhances transparency and ensures resignation processes are fair and time-bound.

2. Extended Probation Period

The probation period for new hires has been officially extended from 90 days to 180 days. This extension allows employers to better evaluate a candidate’s performance while giving new employees more time to adjust.

Either party can still terminate the employment during this probation without advance notice or compensation.

3. Working Hours and Overtime Regulations

The law continues to enforce 8 working hours per day or 48 hours per week for most employees. During Ramadan, Muslim employees work 6 hours per day or 36 hours per week.

Other working hour regulations include:

A mandatory 30-minute break after every 5 hours of continuous work.
Overtime pay is set at 1.5 times the regular hourly wage.
If agreed, employers may offer compensatory leave instead of overtime pay.
Work on official public holidays must be treated and compensated as overtime.

Employers should ensure time tracking systems are updated to record hours accurately and fairly.

4. Comprehensive Leave Policy Updates

The 2025 reforms have provided more clarity on various types of leave:

a) Annual Leave

Employees are entitled to 21 paid days per year, increasing to 30 days after five years of continuous service.

b) Sick Leave

Employees can now receive up to 120 days of sick leave per year, broken down as:
- 30 days fully paid
- 60 days at 75% pay
- 30 days unpaid
During the probation period, employees may take sick leave only after 90 days of employment.
Employers are not allowed to terminate an employee while they are on approved sick leave.

c) Maternity and Paternity Leave

Female employees are entitled to 14 weeks of maternity leave, including 6 weeks mandatory post-childbirth.
Nursing mothers are granted 1 hour of paid nursing time daily for up to one year.
Fathers can now avail 3 days of paternity leave within the first 7 days after childbirth.

d) Marriage and Bereavement Leave

5 days of paid leave are granted for marriage.
In the event of a spouse, parent, or child’s death: 5 days of paid leave.
For the death of a sibling: 3 days of leave.

e) Hajj Leave

Muslim employees with two or more years of continuous service are entitled to 10–15 days of paid Hajj leave, once during their employment.

f) Iddah Leave

Muslim women receive 4 months and 10 days of paid leave after the death of a husband.
Non-Muslim women receive 15 days of paid leave under similar circumstances.

5. Fixed-Term vs. Indefinite Contracts

Clear distinctions have been reinforced between contract types:

Fixed-term contracts expire on a predetermined date or project completion.
If renewed more than three times or extended beyond four years, they may convert into indefinite contracts.
Only Saudi nationals can be employed on indefinite contracts under current guidelines.
Employers must provide 30–60 days’ notice when terminating indefinite contracts and offer compensation equal to 15 days of wages per year of service.

For HR teams, properly defining contract terms and renewal strategies is crucial to staying compliant.

6. Termination Guidelines and End-of-Service Benefits (EOSB)

Labour law updates include stricter regulations on termination and EOSB calculations:

Termination during probation is permitted, but not allowed during sick or maternity leave.
EOSB must be calculated fairly based on final salary and years of service, and in accordance with updated leave laws.
Employers must provide documentation and justification for dismissal in most cases.

EOSB transparency is increasingly important as employees become more aware of their legal entitlements.

7. Digitalization of Labour Processes

Saudi Arabia continues to enhance transparency and efficiency through digital platforms such as:

Qiwa: Central platform for contract management, Saudization status, and worker transfers.
GOSI: Social insurance records and contribution tracking.
Mudad: Wage protection system ensuring timely and documented salary payments.

Employers are legally required to use these platforms for contract registration, salary reporting, and employee data verification.

What These Changes Mean for Employers?

At Yaqoot Manpower Services, we advise all companies to take the following proactive steps:

1. Review Contracts and HR Policies

Update employment contracts to reflect new rules on resignation, leave, and working hours.

2. Train HR and Payroll Staff

Ensure teams are well-informed about changes to EOSB, overtime, and leave entitlements.

3. Adopt Digital Platforms

Fully integrate with MHRSD-mandated platforms (Qiwa, GOSI, Mudad) to maintain compliance.

4. Revisit Saudization Planning

With rising compliance checks, companies must track and plan for Saudization targets more strategically.

5. Conduct a Legal Audit

Evaluate your current HR processes for potential non-compliance or legal risks, especially in termination procedures.

How Yaqoot Manpower Services Can Help?

As a trusted manpower and HR outsourcing agency in Saudi Arabia, Yaqoot Manpower Services offers end-to-end support to help businesses align with the latest legal requirements:

Workforce planning and recruitment (Saudi and expatriate)
Saudization compliance strategy
Contract drafting and policy design
HR audit and legal risk management
Integration with Qiwa, GOSI, and Mudad systems

With over a decade of industry experience, our team stays ahead of regulatory changes to ensure our clients are always compliant and competitive.

Final Thoughts

The 2025 Saudi labour law updates reflect the Kingdom’s commitment to economic transformation and a modernized labor environment. For employers, this means updating policies and practices. For employees, it offers stronger protections and better clarity.

Compliance isn’t just a legal obligation — it’s a cornerstone of sustainable business success in Saudi Arabia.

Partner with Yaqoot Manpower Services to ensure you remain informed, compliant, and future-ready.

21Jun

Everything You Need to Know About UBO Rules in Saudi Arabia in 2025

Introduction

In Saudi Arabia, the government is working hard to make business more honest and transparent. One important step they’ve taken is introducing UBO rules. UBO stands for Ultimate Beneficial Owner. These rules help the authorities know who truly owns or controls a company—even if that person’s name isn’t on official paperwork.

In this blog post, we’ll explain what UBO means, why it’s important, what the rules are in Saudi Arabia in 2025, and what companies need to do to follow them. We’ll keep things simple and clear, so even if you’re just starting to learn about business, you’ll understand it all.

What Is a UBO?

UBO means Ultimate Beneficial Owner. It’s the real person who:

Owns the company (even if it’s through other companies or people),
Controls the company (makes decisions or has power over it),
Or gets most of the money or benefits from the company’s profits.

Let’s take an example:

Suppose Ahmed owns 60% of a company directly. He is a UBO.

Now, imagine a company is owned by another company, which is then owned by a person named Fatima. If Fatima controls everything through those companies, she is the UBO.

So, the UBO is not just someone whose name is on a document. It’s the person who really benefits from or controls the company.

Why UBO Rules Matter?

UBO rules are very important for fighting:

Money laundering (hiding illegal money),
Terrorism financing,
Fraud and corruption.

By knowing who is behind a business, Saudi authorities can:

Make business safer and cleaner,
Protect investors and customers,
Build trust in the country’s financial system.

In short, UBO rules are part of Saudi Arabia’s bigger plan to improve its economy, attract foreign investors, and follow global standards like those set by the Financial Action Task Force (FATF).

Who Needs to Follow UBO Rules in Saudi Arabia?

Almost every business operating in Saudi Arabia must follow UBO rules. This includes:

Companies registered with the Ministry of Commerce (MoC),
Foreign-owned companies operating in the Kingdom,
Joint ventures and partnerships,
Businesses registered in free zones.

Only a few exceptions apply, such as:

Government-owned companies,
Publicly listed companies that already meet transparency rules.

So, if you run a business in Saudi Arabia, you likely need to report who your UBO is.

What Are the UBO Rules in Saudi Arabia in 2025?

As of 2025, the UBO rules in Saudi Arabia include several key requirements:

1. UBO Identification

Businesses must:

Identify all people who directly or indirectly own 25% or more of the company,
Or identify those who have significant control or influence over the company (even if they don’t own 25%).

2. UBO Declaration Form

Companies must fill out and submit a UBO Declaration Form to the Ministry of Commerce. This form must include:

Full name of the UBO,
Nationality and identification number (e.g., Iqama or passport),
Contact details,
Reason why this person is considered the UBO (ownership, control, etc.).

3. Timely Updates

If anything changes (for example, the UBO sells their shares or a new UBO appears), the company must:

Update the information within 30 days.

4. Annual Confirmation

Even if nothing changes, businesses must confirm or update their UBO details once a year.

5. Penalties for Non-Compliance

If a company doesn’t follow the rules, it can face:

Fines,
Business suspension,
Trouble renewing licenses or commercial registrations.

So, it’s very important for companies to take these rules seriously.

How to Identify a UBO: Simple Steps?

To help companies understand who the UBO is, here’s a step-by-step guide:

1. Check Direct Owners

Start by looking at who owns shares in your company. Anyone with 25% or more ownership is a UBO.

2. Look at Indirect Owners

If your company is owned by another company, check who owns that company too. Follow the ownership trail until you find a real person.

3. Consider Control and Influence

Even if someone owns less than 25%, if they control decisions or have special rights, they might still be a UBO.

4. Declare and Record

Once you find your UBO(s), collect their information and submit it to the Ministry of Commerce.

Benefits of UBO Compliance

Following UBO rules may sound like extra work, but it brings several advantages:

Builds trust with banks, customers, and investors,
Keeps your business out of legal trouble,
Helps with smoother audits and licensing,
Shows your company follows international best practices.

UBO compliance is not just a rule—it’s a way to build a responsible and respected business.

Frequently Asked Questions (FAQs)

Q: What if my company doesn’t have a UBO?

A: Every company has at least one person who controls or benefits from it. If you truly can’t find a UBO, you must report the senior management official instead.

Q: Can there be more than one UBO?

A: Yes, if multiple people meet the ownership or control conditions, they must all be listed as UBOs.

Q: Is this rule new?

A: No, the UBO framework was introduced a few years ago, but in 2025, enforcement and digital reporting systems have become stricter and more advanced.

Q: Where do I submit the UBO form?

A: You can submit it through the Ministry of Commerce’s electronic portal or through your business service provider (like a company formation agent or legal consultant).

Final Thoughts

Saudi Arabia is becoming a global business hub, and rules like the UBO declaration are a big part of this transformation. By making business ownership more transparent, the government ensures a safer, more reliable, and more attractive environment for everyone.

If you own a company or plan to start one in Saudi Arabia, make sure you understand your responsibilities under the UBO rules. It’s not just about following the law—it’s about building a stronger future for your business and your country.

Need Help?

If you’re unsure about how to find or report your UBO, it’s best to talk to a legal advisor or business consultant in Saudi Arabia. They can guide you step by step and help you stay compliant.

How Yaqoot Manpower Services Can Help in Stay Compliant in Saudi Arabia?

At Yaqoot Manpower Services, we not only help businesses find skilled and reliable workers across Saudi Arabia, but we also assist in staying fully compliant with local regulations, including UBO (Ultimate Beneficial Owner) reporting requirements. Our expert team supports companies by identifying their UBOs, preparing accurate documentation, and submitting the required forms to the relevant authorities on time. With over a decade of experience in HR, staffing, and business support, Yaqoot ensures your operations remain smooth, legal, and transparent—so you can focus on growing your business with confidence.

13Jun

Why SCE Registration is Mandatory for Engineers in Saudi Arabia

If you’re an engineer working in Saudi Arabia or planning to work there, you’ve probably heard people talk about SCE registration. But what is it? Why is it so important? And what happens if you don’t register?

In this post, we’ll explain everything in a clear and friendly way—just like how a teacher would explain it to a 5th grader. By the end, you’ll know why the Saudi Council of Engineers (SCE) is a big deal, especially if you’re a foreign engineer.

What is the SCE?

Let’s start from the beginning.

The Saudi Council of Engineers (SCE) is a government organization in Saudi Arabia. It was created to make sure that people who work as engineers really have the skills, knowledge, and degrees to do their jobs.

Think of the SCE like a referee in a sports game. It makes sure everyone is playing by the rules. In the world of engineering, SCE makes sure that:

Only qualified people get engineering jobs
Engineers follow safety rules and ethical standards
Fake degrees or fake engineers don’t enter the workforce

Why Do Engineers Need to Register?

Now, let’s get to the main point—why is SCE registration mandatory?

If you want to work legally in Saudi Arabia as an engineer, you must register with the SCE. Without registration, your job title won’t be recognized by the Saudi government, and you may not be allowed to work in your profession.

Here’s what SCE registration allows you to do:

1. Work legally as an engineer in Saudi Arabia

2. Renew your Iqama (residence permit) every year

3. Show employers that your degree is real and verified

4. Access training programs and grow your engineering career

5. Apply for better job positions with confidence

What Happens If You Don’t Register?

Imagine you are an engineer from Pakistan, India, or Egypt who just got a great job offer in Riyadh. You arrive, get settled, and start working. But when it’s time to renew your Iqama, the HR department says, “You’re not registered with SCE. We can’t renew your work permit.”

Without SCE registration:

You cannot renew your Iqama
You risk losing your job
Your job title might be changed to “Labor” or “Technician,” even if you’re a qualified engineer
Your employer may refuse to process your papers

That’s why registration isn’t just a good idea—it’s mandatory by law.

Which Professions Require SCE Registration?

Many people think only big engineers (like civil or electrical engineers) need to register. But that’s not true. Anyone working in engineering-related fields must register.

This includes:

Civil Engineers
Electrical Engineers
Mechanical Engineers
Chemical Engineers
Industrial Engineers
Architects
AutoCAD Draftsmen
Engineering Technicians
Surveyors

Even people in supporting roles (like design and drawing) often need to register if their Iqama says “engineer” or anything similar.

What Does the SCE Check?

The SCE wants to make sure you’re really qualified for your job. So, they check:

Your university degree (to make sure it’s real)
Your job title on your Iqama (it must match your qualification)
Your personal information (passport, Iqama, etc.)
Your education documents must be attested (stamped) by your home country and Saudi embassy

If everything looks good, you get a SCE Membership ID and certificate. This means you’re now a recognized engineer in Saudi Arabia.

Why Did Saudi Arabia Make This Rule?

Saudi Arabia is working hard to improve its cities, roads, buildings, and industries. The government wants to make sure that only the best engineers are doing this work. That’s why they made a rule: every engineer must register with the SCE.

This helps the country:

Improve safety and quality in engineering projects
Bring in skilled professionals and block fake degree holders
Build strong infrastructure for the future

It also helps engineers:

Get respect in the industry
Access professional development
Apply for top jobs with confidence

How Do You Register with the SCE?

Here’s a step-by-step guide that even a kid can understand:

Step 1: Go to the Website

Visit www.saudieng.sa

Step 2: Make an Account

Click on “New User” and fill in your details (like name, email, and Iqama number).

Step 3: Upload Your Documents

You need to upload:

Passport copy
Iqama copy
Degree certificate (attested)
Passport-size photo
Your CV
Any other certificates

Step 4: Pay the Fee

Engineers usually pay around 750–850 SAR
Technicians pay about 400–500 SAR

You’ll get a Sadad payment number and can pay online.

Step 5: Wait for Approval

The SCE team will check your documents. If everything is correct, they will send you your SCE membership.

Don’t Forget: Renew Every Year

Just like your school ID or library card, your SCE membership expires after one year. So you must renew it yearly to keep your Iqama valid.

If your membership expires:

You may not be able to renew your Iqama
Your employer might put your job on hold
You could face fines or penalties

Common Problems (And How to Avoid Them)

Many engineers face trouble with SCE because of small mistakes. Here are a few examples:

Your degree isn’t attested

Fix: Go to your country’s Higher Education body and the Saudi Embassy to get proper stamps.

Your Iqama job title says “Labor” or “Sales”

Fix: Ask your employer to correct it through Qiwa or GOSI portal.

You uploaded blurry documents

Fix: Make sure all scans are clear and in color.

Benefits of Being SCE Registered

Being registered with the SCE is not just a legal step. It’s a professional badge of honor.

Here’s what you get:

Legal permission to work
Access to training and courses
Better job offers and promotions
Connection with other engineers
Peace of mind—no fear of Iqama issues

Final Thoughts

If you’re working or planning to work as an engineer in Saudi Arabia, SCE registration is not optional—it’s the law. It protects your job, your career, and your future.

So don’t wait until the last moment. Gather your documents, log on to the website, and register. It’s one of the smartest things you’ll do as a professional.

And if you feel confused or need help, don’t worry—there are trusted recruitment agencies and advisors who can guide you step-by-step.

Need Help with SCE Registration?

If you’re a Pakistani, Indian, Filipino, or Egyptian engineer and need help with the SCE registration process, Yaqoot Manpower Services in Saudi Arabia here to assist you.

We help with:

Degree attestation
Job title correction
Document submission
Tracking your application
Engineering job placement across Saudi Arabia

Let us help you secure your future. Contact us today.

14Apr

A Complete Guide to Fixed and Non-Fixed Employment Contracts in KSA

When someone gets a job in Saudi Arabia, they usually sign something called an employment contract. This is a legal paper that explains everything about the job—like how much they’ll be paid, what kind of work they’ll do, how long the job will last, and what rules they have to follow.

But did you know there are two main types of employment contracts in Saudi Arabia?

They are:

Fixed-term contracts
Non-fixed (or indefinite) contracts

If those names sound a little confusing, don’t worry! In this blog post, we’ll explain each one clearly and simply so you can understand what they mean, how they’re different, and which one might be better for certain situations.

What Is an Employment Contract?

Let’s start with the basics. An employment contract is like a written promise between a worker and an employer. It says:

What kind of work the person will do
How much they will be paid
When the job starts
What time they should work (like from 9 to 5)
If there are any days off
How long the job will last
What happens if one side wants to stop the contract

This contract protects both the worker and the employer. It makes sure everyone is clear on what to expect. Now let’s look at the two main types.

What Is a Fixed-Term Contract?

A fixed-term contract is a job contract that has a clear start date and end date. It tells you exactly how long the job will last.

Example:

Let’s say you sign a contract that says your job will be from January 1, 2025 to December 31, 2025. That’s a fixed-term contract because it ends after one year.

Key Features of Fixed-Term Contracts:

The end date is already written in the contract
The contract ends automatically unless both sides want to renew it
It’s often used for project-based jobs, temporary positions, or seasonal work
Employers can renew it, but after 3 renewals or 4 years, it becomes a non-fixed contract by law (according to Saudi Labor Law)

Pros of Fixed Contracts:

Good for short-term projects
Helps companies hire staff for a specific time only
Clear start and end dates

Cons of Fixed Contracts:

Less job security for workers
Can end even if the worker wants to stay
Might not offer the same long-term benefits

What Is a Non-Fixed (Indefinite) Contract?

A non-fixed contract is a job contract that does not have an end date. It continues until someone decides to end it—either the employer or the worker.

Example:

You get hired with a contract that just says “Start Date: March 1, 2025,” but there’s no end date. That means you’ll work as long as both sides are happy.

Key Features of Non-Fixed Contracts:

No set end date
The job continues until someone gives notice (usually in writing)
Common for long-term or permanent jobs
Either side can end it, but they must follow notice rules under Saudi Labor Law

Pros of Non-Fixed Contracts:

More job security
Often comes with better benefits (like bonuses, paid leave, etc.)
Builds long-term trust between worker and employer

Cons of Non-Fixed Contracts:

Harder for employers to end the contract quickly
Workers might feel “stuck” if they want to leave suddenly
May require formal termination notice and sometimes end-of-service benefits

How Do You Know Which Contract You Have?

It’s simple! Just look at your job contract:

If there is a clear end date, it’s a fixed contract
If there is no end date, it’s a non-fixed contract

Also, your employer (or HR department) should tell you which type it is when you sign the contract.

What Happens When a Contract Ends?

For Fixed-Term Contracts:

The contract ends automatically on the end date
If the company wants to keep the worker, they must renew the contract
If not, the worker moves on and the employer does not need to renew

For Non-Fixed Contracts:

Either side can end the contract with written notice (usually 30–60 days)
The employer must have a valid reason, especially if they’re the one ending it
The worker may receive end-of-service benefits based on how long they worked

What Does Saudi Labor Law Say?

Saudi Arabia’s Labor Law protects both employers and employees. Here are some important points:

1. Maximum Contract Renewals: If a fixed-term contract is renewed 3 times, or if the employee works for more than 4 years on the same contract, it becomes a non-fixed contract.

2. Termination Rules:

Employers must give a valid reason to terminate a non-fixed contract
Workers must give proper notice if they want to leave early
In some cases, end-of-service pay is required

3. Probation Periods: Most contracts start with a probation period (usually 90 days). During this time, the contract can be ended with less notice.

Which One Should You Choose?

It depends on your needs and your job.

If you’re a worker, ask yourself:

Do I want something permanent?
Am I okay if the job ends after a few months?

If you’re an employer, ask:

Do I need someone just for a project or season?
Do I plan to keep this employee for a long time?

Final Thoughts

Understanding the difference between fixed and non-fixed contracts in Saudi Arabia is very important. It helps both workers and employers avoid confusion or legal trouble.

Before signing anything, always read your contract carefully. If you’re not sure, ask someone you trust or a legal advisor to explain it to you. Your contract is more than just paper—it’s your guide to your job, your rights, and your future.

Bonus Tip:
Keep a copy of your signed contract in a safe place. You might need it later!

Whether you’re a Saudi business owner looking for manpower supply or a job seeker looking for an exciting job opportunity in the kingdom, get in touch with the Yaqoot Manpower Services in Saudi Arabia to get your job done the hassle-free way.

07Apr

How Yaqoot Manpower Ensures Compliance with Saudi Labor Laws

Introduction

When companies in Saudi Arabia hire workers—whether it’s for construction, healthcare, logistics, hospitality, or oil and gas—one thing matters just as much as finding the right person for the job: following the law.

Saudi Arabia has very specific labor laws that protect both the employee and the employer. These laws are always evolving, and keeping up with them can be tough, especially for businesses that are focused on growing and running their day-to-day operations.

That’s where Yaqoot Manpower comes in.

With years of experience in the manpower and recruitment industry, Yaqoot Manpower has built a strong reputation for helping businesses stay 100% compliant with Saudi labor laws—so they can focus on what they do best.

In this blog, we’ll explain what compliance means, why it’s so important, and how Yaqoot Manpower ensures that all legal requirements are met, every step of the way.

What Does “Compliance” Really Mean?

Before we dive into what Yaqoot Manpower does, let’s quickly explain what labor law compliance is.

In simple terms, compliance means following the rules set by the government—especially when it comes to how businesses hire, pay, treat, and manage workers.

In Saudi Arabia, labor rules are issued by the Ministry of Human Resources and Social Development (MHRSD), the General Organization for Social Insurance (GOSI), and other government bodies.

These rules cover things like:

Employment contracts
Working hours and days off
Health and safety
Salaries and wage protection
Social insurance contributions
End-of-service benefits
Hiring of foreign workers

If a company breaks these rules—even by mistake—it can face heavy fines, legal trouble, and damage to its reputation.

That’s why smart companies work with manpower agencies like Yaqoot that specialize in staying on top of all the latest legal updates.

How Yaqoot Manpower Stays Compliant—Step by Step

Here’s how Yaqoot Manpower ensures that every worker, every client, and every project follows Saudi labor laws perfectly:

1. Clear and Legal Employment Contracts

A solid employment contract is the foundation of every worker-employer relationship. In Saudi Arabia, contracts must include details like:

Job title and duties
Salary and payment schedule
Duration of employment
Working hours and leave days
End-of-service entitlements

What Yaqoot Does:

Yaqoot prepares legal contracts that meet all local requirements. Each contract is written in both Arabic and English, signed by all parties, and filed properly in government systems like the Qiwa platform. Nothing is left to chance.

2. Timely Salary Payments and WPS Compliance

Saudi Arabia uses a Wage Protection System (WPS) to make sure all workers are paid on time and fairly. Employers must report salary payments through this system or face penalties.

What Yaqoot Does:

Yaqoot handles salary disbursement through secure bank transfers, always on time. All payments are properly recorded and reported via WPS. Workers get full visibility of their payments, and clients stay in the clear.

3. GOSI and Social Insurance Contributions

Every Saudi and non-Saudi worker must be registered with the General Organization for Social Insurance (GOSI), and employers must pay contributions on time.

What Yaqoot Does:

Yaqoot takes care of registering workers, calculating contributions, and submitting payments to GOSI. This ensures that both the employer and employee are covered for things like workplace injuries and retirement benefits.

4. Legal Work Permits and Iqama Management

For foreign workers, having a valid iqama (residency permit) and work visa is essential. Without these documents, workers cannot legally stay or work in Saudi Arabia.

What Yaqoot Does:

Yaqoot manages the entire process—visa issuance, medical tests, iqama renewals, and government fees. The company monitors expiry dates and renews documents on time to prevent violations.

5. Tracking Working Hours, Overtime, and Rest Days

Saudi labor law defines maximum working hours, overtime rules, and rest days. Employers must follow these strictly to avoid burnout and maintain fairness.

What Yaqoot Does:

With its internal time-tracking and shift management tools, Yaqoot monitors hours worked, calculates overtime pay, and ensures employees get their weekly day off. These records are shared with clients transparently.

6. End-of-Service Benefits (ESB) Calculation

When a worker leaves a job, they’re entitled to end-of-service benefits based on their length of employment and salary. This calculation must be accurate to avoid disputes.

What Yaqoot Does:

Yaqoot uses standardized formulas approved by Saudi labor law to calculate ESB. Workers get their rightful dues, and companies avoid unnecessary complications or legal cases.

7. Government Platform Compliance (Qiwa, Muqeem, GOSI, WPS)

Saudi Arabia now uses several digital platforms to monitor labor market activity. Missing even one report or update can lead to a fine or account suspension.

What Yaqoot Does:

Yaqoot’s dedicated compliance team manages all government accounts and ensures data is accurate and updated. Whether it’s renewing a work permit on Muqeem or uploading a contract on Qiwa, it gets done right and on time.

8. Regular Training and Legal Updates

Saudi labor law changes often. New rules are introduced, or existing ones get updated. Staying informed is the only way to stay compliant.

What Yaqoot Does:

Yaqoot’s legal and HR teams attend industry workshops, follow government circulars, and train regularly. This allows them to update their systems and educate their clients accordingly.

9. Worker Welfare and Grievance Redressal

Treating workers fairly isn’t just about avoiding fines—it’s also about building a good business reputation. Happy, protected workers perform better.

What Yaqoot Does:

Yaqoot offers workers a dedicated helpline for complaints, regular site visits for inspections, and open-door policies. Any issues—whether legal or personal—are resolved with care and respect.

10. Full Transparency for Clients

Businesses want peace of mind when they outsource manpower. They need to know that everything is above board.

What Yaqoot Does:

Yaqoot provides full access to compliance reports, payroll summaries, contract archives, iqama status lists, and more. Clients can verify everything anytime. No hidden fees. No surprises.

Why Compliance Matters More Than Ever?

With Saudi Arabia’s Vision 2030 pushing for labor reform, Saudization, and stronger governance, compliance is not optional—it’s essential.

Authorities now inspect more frequently and enforce rules more strictly. For companies that ignore the law, consequences can include:

Hefty fines
License suspension
Visa bans
Reputation damage
Legal action from workers

Yaqoot Manpower helps businesses avoid these risks entirely.

Final Thoughts

Managing labor law compliance in Saudi Arabia can be complex—but it doesn’t have to be stressful. When you work with a trusted manpower partner like Yaqoot Manpower Services in Saudi Arabia, you can be confident that every box is ticked, every law is followed, and every worker is treated fairly.

Yaqoot combines deep local expertise, digital tools, and a human touch to make compliance easy, seamless, and worry-free for employers of all sizes.

Whether you’re running a factory, launching a new project, or scaling your business, Yaqoot Manpower is your partner in legal, reliable, and ethical workforce management.

20Mar

What Every Worker in Saudi Arabia MUST Know Before Signing a Contract

Starting a new job in Saudi Arabia can be exciting. Whether you’re a local or an expat, one of the most important things you’ll do before starting work is sign an employment contract. This contract is not just a piece of paper. It’s a legal agreement that explains your rights, your responsibilities, and how your job will work.

If you don’t read it carefully, or don’t understand what it says, you might face problems later. That’s why we wrote this simple, clear guide to help you understand everything you MUST know before signing a work contract in Saudi Arabia.

1. What Is an Employment Contract?

An employment contract is a written agreement between you and your employer. It lists important details about your job like:

Your job title
Your salary
Your working hours
Your vacation days
How long the job will last
The rules you must follow
And what happens if you leave or get fired

This contract is a legal document, which means it can be used in court if there’s a problem. So, never treat it like “just paperwork.”

2. Types of Employment Contracts in Saudi Arabia

There are two main types of contracts:

a. Fixed-Term Contract

This contract is for a specific amount of time — for example, 1 year or 2 years. It ends automatically when the time is up, unless you and your employer both agree to renew it.

b. Unlimited (Open-Ended) Contract

This contract doesn’t have an end date. It continues until either you or your employer decide to end it, by giving proper notice.

Important: If you’re an expat on a work visa, your contract usually matches the duration of your Iqama (residency permit).

3. What Should Be Included in Your Contract?

Your contract should clearly include:

Full name and details of both the worker and the employer
Start date and (if fixed) end date
Job title and job description
Salary details, including any bonuses or allowances (housing, transport, etc.)
Working hours (standard is 8 hours/day, 48 hours/week; fewer during Ramadan)
Overtime pay rules
Leave entitlements (annual leave, sick leave, public holidays)
Notice period for resignation or termination
Probation period (usually up to 90 days)
End of service benefits

If anything is missing or not clear, ask for it to be added or explained before you sign.

4. What Language Will the Contract Be In?

In Saudi Arabia, the official language is Arabic. So, even if your employer gives you a copy in English, the Arabic version is the one that counts in legal matters.

Tip: Always get a trusted translation if you don’t read Arabic well.

5. Understand Your Rights Under Saudi Labour Law

The Saudi Labour Law protects both workers and employers. Here are some of your key rights:

1. Right to a Written Contract

Your employer must give you a written contract within 90 days of starting work.

2. Right to Fair Wages

Your salary should be paid on time, at least once a month. Delayed wages are illegal.

3. Right to Rest and Leave

You’re entitled to:

21 days of paid annual leave (increases to 30 days after 5 years)
11 official public holidays
Sick leave (up to 30 days paid, more under certain conditions)
Maternity and paternity leave (for eligible workers)

4. End of Service Benefits

When your contract ends, you may get a lump sum payment, depending on how long you worked and how your contract ended.

6. Beware of These Red Flags

Here are some warning signs to watch for in a job contract:

No clear salary mentioned
Vague job title or description
Unusual or unfair penalties for quitting early
No mention of overtime or leave
Promises made verbally but not written in the contract

If it’s not in writing, it doesn’t count. Always make sure everything you agreed on is written in the contract.

7. Probation Period: What Does It Mean?

Most jobs in Saudi Arabia include a probation period. This is a short time (up to 90 days) when the employer can test your work. During this time:

You can be let go without full end-of-service benefits
You can resign more easily
You should still receive your salary and basic rights

If your employer wants to extend this period, it must be agreed to in writing — and can only go up to 180 days max (with mutual consent).

8. Notice Period: How to Leave Your Job the Right Way

If you want to leave your job, or if your employer wants to end your contract, there must be a notice period — usually 30 to 60 days, depending on your contract.

Leaving without notice may mean:

You lose some or all of your end-of-service benefits
You may be banned from working in Saudi Arabia again (if you’re an expat)

Always give written notice and follow the legal process to protect yourself.

9. Can the Employer Change the Contract Later?

Not without your written agreement. If your employer wants to change your job title, pay, or working hours, they must:

Get your permission in writing
Create a new contract or addendum
Ensure changes follow labour law

If they force changes without your consent, you can file a complaint with the Ministry of Human Resources and Social Development (MHRSD).

10. Know Where to Go for Help

If you have a problem with your employer, or your contract is being violated, you can contact:

MHRSD (Ministry of Human Resources and Social Development)
Website: www.hrsd.gov.sa
Labor Disputes Courts: For serious cases where legal action is needed
Your Embassy (if you’re a foreign worker in Saudi Arabia): They can offer guidance and protection

Also, the Musaned platform (for domestic workers) helps with contracts, complaints, and visa issues.

Final Thoughts

Before you sign any contract in Saudi Arabia, take a deep breath, sit down, and read it carefully. Don’t be shy to ask questions or ask for changes. A good employer will understand that you want to protect your rights.

Here’s a quick checklist before you sign:

Read every part
Get it in writing
Make sure it’s in Arabic (or translated)
Ask about salary, leave, and overtime
Understand your notice period
Keep a copy for yourself

Whether you’re a cleaner, engineer, teacher, or IT expert, your contract is the foundation of your job. Treat it seriously — and you’ll start your work journey in Saudi Arabia with confidence and peace of mind.

Need Help Understanding a Work Contract in Saudi Arabia?

If you’re unsure, talk to a legal advisor or labor consultant before signing. It’s better to ask now than regret later.

19Feb

Employer Rights & Responsibilities in Saudi Arabia: A Complete Guide

Understanding employer rights and responsibilities in Saudi Arabia is crucial for businesses operating in the Kingdom. Whether you are a local business owner or a foreign company looking to expand, knowing the legal framework helps in maintaining compliance, ensuring fair treatment of employees, and fostering a productive work environment.

This detailed guide provides an easy-to-understand overview of employer rights and obligations under Saudi labor law.

Employer Rights in Saudi Arabia

Employers in Saudi Arabia have specific rights granted under the Saudi Labor Law, which allows them to manage their workforce effectively while protecting business interests. Below are some key rights:

1. Hiring and Termination

Employers have the right to hire employees based on their business needs while following Saudi Arabia’s Saudization (Nitaqat) program, which encourages the employment of Saudi nationals.
Termination of employees is allowed, provided it follows legal procedures, such as giving proper notice and ensuring valid reasons, such as misconduct, repeated violations, or business closure.
Employers can put employees on probation for a maximum of 90 days, extendable by another 90 days, to evaluate their performance before confirming permanent employment.

2. Setting Work Conditions

Employers can define work schedules, responsibilities, and workplace rules as long as they comply with labor laws.
Working hours should not exceed 8 hours per day or 48 hours per week, except during Ramadan when Muslim employees work a maximum of 6 hours per day.
Employers can implement overtime, provided they pay employees an extra 50% of their regular hourly wage for overtime work.

3. Managing Employee Conduct

Employers have the right to enforce workplace policies related to dress code, behavior, attendance, and safety standards.
Disciplinary actions such as warnings, salary deductions, or termination can be taken if an employee violates company policies.

4. Intellectual Property & Confidentiality

Employers can enforce confidentiality agreements to protect business secrets and sensitive information.
In some cases, employers can claim ownership of an employee’s work, such as inventions or creative projects, if developed during employment and related to the business.

5. Sponsorship & Residency (Iqama) Control

Employers sponsor foreign employees by providing work permits and residency (Iqama) under the Kafala (sponsorship) system.
Employers have the right to request exit re-entry permits for expatriate workers and control employment transfers, though recent reforms allow more worker mobility.

Employer Responsibilities in Saudi Arabia

While employers have rights, they also carry significant responsibilities to ensure fair treatment of employees and compliance with labor laws. Below are the key responsibilities:

1. Providing a Written Employment Contract

Employers must provide employees with a written contract that outlines job duties, salary, working hours, and other conditions.
Contracts should be in Arabic (or bilingual) and registered in the labor system for legal validity.

2. Paying Salaries on Time

Employers must pay employees their wages on time, usually monthly, through a bank transfer system known as the Wage Protection System (WPS).
Any delay in payment can result in fines or legal action from labor authorities.

3. Ensuring a Safe Work Environment

Employers must comply with occupational health and safety regulations to provide a secure workplace.
They must supply safety gear, conduct risk assessments, and take measures to prevent workplace accidents.
In case of workplace injuries, employers must compensate employees as per labor law provisions.

4. Providing Annual Leave & Holidays

Employees are entitled to a minimum of 21 days of paid annual leave, increasing to 30 days after five years of service.
Public holidays, such as Eid Al-Fitr and Eid Al-Adha, must also be granted as per labor regulations.
Sick leave is also mandatory, with employees entitled to 120 days of leave (full pay for the first 30 days, 75% for the next 60 days, and unpaid leave for the remaining 30 days).

5. Granting End-of-Service Benefits (ESB)

Employers must provide an end-of-service gratuity to employees based on their years of service.
Employees with two to five years of service receive one-third of one month’s wage per year; those with five to ten years receive two-thirds; and those with over ten years get a full month’s wage per year of service.

6. Non-Discrimination & Fair Treatment

Employers must treat employees fairly, regardless of nationality, gender, or religion.
Harassment or discrimination in the workplace is prohibited and can lead to legal consequences.

7. Facilitating Employee Resignations & Transfers

Employers must allow employees to resign by following the notice period stated in the contract.
Under recent labor reforms, foreign employees can switch jobs without employer approval after completing their contract or serving the required notice period.

Legal Consequences for Non-Compliance

Employers who fail to comply with Saudi labor laws may face penalties, including:

Fines and legal actions for delayed wages, lack of contracts, or safety violations.
Business license suspension in extreme cases of labor law violations.
Blacklisting of the company, preventing further hiring of foreign workers.

Conclusion

Understanding employer rights and responsibilities in Saudi Arabia is vital for running a legally compliant and successful business. Employers must balance their authority with fair treatment of employees while following labor regulations. By ensuring timely salary payments, providing safe work conditions, and respecting legal obligations, businesses can build a strong and reputable workforce in the Kingdom.

For employers looking to streamline their recruitment and HR processes, partnering with a reliable manpower agency in Saudi Arabia can simplify compliance and ensure smooth workforce management in Saudi Arabia.

Get in touch with Yaqoot Manpower Services in Saudi Arabia if you need some professional help whether you are an employer looking for manpower supply or a job seeker looking for job consultancy in the kingdom.

10Feb

The Ultimate Guide to Labor Law Compliance in Saudi Arabia for Foreign Investors

Introduction

Saudi Arabia is one of the largest economies in the Middle East and a prime destination for foreign investment. With its Vision 2030 plan, the country is actively diversifying its economy, creating new opportunities for businesses worldwide. However, if you are a foreign investor planning to set up a business in Saudi Arabia, understanding and complying with labor laws is crucial to running a successful operation.

In this detailed and step-by-step guide, we will break down the key aspects of labor law compliance in Saudi Arabia in a clear and easy-to-understand way, ensuring that you stay within the legal framework while managing your workforce effectively.

Understanding Saudi Labor Law

The Saudi Labor Law governs employment relationships in the Kingdom and is enforced by the Ministry of Human Resources and Social Development (MHRSD). It applies to all private-sector employees, including foreign workers. The law covers recruitment, employment contracts, wages, working hours, termination policies, and more.

1. Employment Contracts

All employees in Saudi Arabia must have a written employment contract in Arabic, detailing key terms such as:

Job title and responsibilities
Salary and benefits
Working hours and leave entitlements
Contract duration (fixed-term or indefinite)

If a dispute arises and the contract is not in Arabic, the Arabic version prevails.

2. Work Permits and Iqama (Residence Permit)

Foreign workers in Saudi Arabia must have a valid work permit and Iqama, issued by the employer through the Ministry of Interior. Employers are responsible for:

Sponsoring employees and ensuring visa compliance
Renewing work permits and Iqamas before expiry
Covering costs related to work permits and medical insurance

Without an Iqama, a foreign worker cannot legally work or access basic services.

3. Saudization (Nitaqat System)

Saudi Arabia has a workforce nationalization program called Nitaqat, which mandates that companies hire a certain percentage of Saudi nationals. The program classifies businesses into categories (Platinum, Green, Yellow, and Red) based on their compliance level.

Foreign investors must carefully plan their recruitment strategy to meet Saudization requirements, or they may face penalties, such as:

Restrictions on hiring new foreign workers
Non-renewal of work permits for current employees

4. Working Hours and Overtime

The standard workweek is 48 hours (8 hours per day, 6 days a week).
During Ramadan, Muslim employees work 6 hours per day.
Overtime pay is 150% of the regular wage for extra hours worked.
Friday is the designated weekly rest day, though employers may assign another day.

5. Wages and Payroll Compliance

Employers must pay salaries through the Wage Protection System (WPS), ensuring transparency and timely payments. Key payroll regulations include:

Salaries must be paid at least once a month.
The minimum wage for Saudi employees is 4,000 SAR to be counted under Saudization quotas.
Employers must contribute to social insurance (GOSI) for employees.

6. Leave Entitlements

Employees are entitled to:

Annual leave: 21 days (increases to 30 days after five years of service)
Sick leave: Up to 120 days (first 30 days fully paid, then partial payments)
Maternity leave: 10 weeks (fully paid for Saudi women, partially paid for others)
Public holidays: Typically, Eid and National Day holidays

7. Employee Termination and End-of-Service Benefits

Termination must follow legal procedures to avoid labor disputes. Common reasons for termination include:

Resignation (employee must give notice)
Employer-initiated termination (must have a valid reason)
Contract expiration

Upon termination, employees are entitled to end-of-service benefits (ESB) based on their tenure:

Half a month’s salary per year for the first five years
One full month’s salary per year after five years

8. Health and Safety Regulations

Employers must provide a safe and healthy work environment by:

Conducting regular safety training
Providing protective equipment when needed
Reporting workplace injuries to authorities

The Ministry of Human Resources and Social Development enforces workplace safety regulations, and non-compliance can lead to fines or legal action.

Key Compliance Challenges for Foreign Investors

1. Navigating Saudization Requirements

Balancing the hiring of foreign and local workers can be challenging. Working with recruitment agencies can help businesses meet Saudization targets efficiently.

2. Keeping Up with Regulatory Changes

Saudi labor laws evolve frequently, requiring businesses to stay updated. Engaging with local legal experts can help foreign investors ensure compliance.

3. Payroll and Taxation Issues

Handling salaries, social insurance, and taxes correctly is crucial. Employers should implement payroll management systems or outsource payroll services for compliance.

4. Handling Disputes and Legal Issues

Labor disputes should be resolved through mediation before escalating to the labor courts. Employers should maintain clear employment policies to prevent conflicts.

Conclusion

For foreign investors, understanding Saudi Arabia’s labor laws is essential for a smooth business operation. Ensuring compliance with employment contracts, work permits, Saudization, wages, and termination policies will protect your business from legal issues and foster a productive work environment.

Partnering with HR and legal experts can simplify the compliance process, allowing you to focus on growing your business in Saudi Arabia.

By staying informed and proactive, foreign investors can successfully navigate labor law requirements and build a thriving workforce in the Kingdom.

If you’re looking for manpower supply company in Saudi Arabia, contact us or call us at +966 56 400 3762 to discuss your manpower needs.