A Guide to Updated Saudi Labor Law in 2025

The Saudi Labor Law has undergone significant amendments in 2025, marking a pivotal shift in employment practices across the Saudi Kingdom. These changes aim to enhance worker rights, modernize employment frameworks, and align with Saudi Vision 2030’s objectives of economic diversification and job market flexibility. For employees and employers alike, understanding these updates is crucial to ensure compliance and leverage the opportunities they bring.

In this comprehensive guide, we’ll address the key amendments to the Saudi Labor Law in 2025, their implications, and actionable steps for navigating this evolving legal scenario. Whether you’re an employee seeking clarity on your rights or an employer aiming to adapt your policies, this article provides the solutions you need.

Key Amendments in Saudi Labor Law 2025

The 2025 amendments to Saudi Labor Law introduced sweeping changes aimed at balancing employee protections with employer obligations. Below are the most significant updates:

1. Enhanced Leave Entitlements

Maternity Leave: Female employees are now entitled to six weeks of mandatory leave post-childbirth, with an additional six weeks that can be distributed as needed. Maternity leave can also begin up to four weeks before the expected delivery date.

Paternity Leave: A new provision grants paternity leave for fathers, reflecting a more inclusive approach to family responsibilities.

Bereavement Leave: Employees are entitled to three days of leave upon the death of a sibling, ensuring support during personal crises.

2. Resignation and Termination Policies

A clear definition of resignation has been introduced, requiring employees on indefinite contracts to provide a 30-day notice period before leaving their job. Employers terminating such contracts must provide a 60-day notice period.

Employees on fixed-term contracts now have formal rights to resign with appropriate notice, ensuring greater workforce flexibility.

3. Overtime Compensation

Employers can now compensate overtime hours with additional vacation days instead of monetary payment, provided they obtain the employee’s consent. Here is a overtime compensation calculator for Saudi Arabia, where you get can get some idea about what will you get paid.

4. Probation Period Extension

The probation period has been extended to 180 days (approximately six months). During this time, either party can terminate the contract without restrictions.

5. Equal Opportunities and Non-Discrimination

The law emphasizes equal opportunities for all employees and job applicants while strictly prohibiting workplace discrimination based on gender, nationality, or other factors.

6. Housing and Transportation Allowances

Employers must provide housing or a housing allowance and transportation or a transportation allowance for their employees. This ensures better living standards for workers across sectors.

Check: Essential Employment Contract Elements

Employment Contract Requirements Under Saudi Labor Law

The updated labor law places significant emphasis on formalizing employment contracts. Article 50 outlines specific requirements that all contracts must meet:

Clearly define job roles, salary details, working hours, trial periods, benefits, and termination terms.

Specify whether contracts are fixed-term or ongoing. For fixed-term contracts, renewal terms must be explicitly mentioned.

Include provisions for annual leave, sick leave, maternity leave, and other entitlements as per the law.

Highlight workplace safety measures and compliance with labor laws.

State conditions for resignation or termination during probationary periods (first 90 days).

Implications for Employers

The amendments bring both opportunities and responsibilities for employers in Saudi Arabia. To remain compliant and competitive in attracting talent, businesses must adapt their policies accordingly:

Review Employment Contracts: Ensure all contracts align with the updated legal requirements regarding notice periods, leave entitlements, and allowances.

Update Internal Policies: Revise company policies to reflect changes in disciplinary procedures, resignation processes, and Saudization quotas.

Enhance Compliance Frameworks: Implement systems to manage new obligations like housing allowances and transport benefits while preparing for stricter enforcement measures.

Failure to comply with these regulations may result in penalties or reputational damage.

Benefits for Employees

The updated labor law significantly enhances worker rights in Saudi Arabia:

Greater job security through structured resignation and termination policies.

Improved work-life balance with expanded leave entitlements.

Protection against workplace discrimination ensures fair treatment for all employees.

These changes align with international labor standards and foster a more inclusive work environment.

How the Amendments Align With Vision 2030

Saudi Vision 2030 aims to diversify the Kingdom’s economy while fostering a competitive labor market. The recent amendments support these goals by:

Encouraging private-sector growth through enhanced worker protections.

Promoting gender equality in the workplace via maternity and paternity leave provisions.

Strengthening Saudization policies to increase local employment rates.

These reforms not only modernize labor practices but also attract foreign investment by creating a stable and transparent regulatory framework.

Steps for Navigating the New Labor Law

To effectively adapt to these changes, employers and employees should take the following steps:

For Employers:

Conduct a thorough review of all employment contracts.

Train HR teams on updated legal requirements.

Implement systems for tracking compliance with new obligations like housing allowances.

For Employees:

Familiarize yourself with your rights under the amended law.

Ensure your employment contract reflects the updated provisions.

Consult legal experts if you encounter discrepancies or violations.

Conclusion

The amendments to Saudi Labor Law in 2025 represent a transformative step toward modernizing employment practices in the Saudi Kingdom. By enhancing worker protections, expanding employer obligations, and aligning with Vision 2030’s objectives, these changes create a more equitable and dynamic labor market.

For employers, staying compliant is essential to avoid penalties and maintain competitiveness. For employees, understanding your rights ensures you can fully benefit from these reforms. By proactively adapting to these updates, both parties can thrive in Saudi Arabia’s evolving employment scenario.

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