Saudi Labour Law Updates in 2025

What are the major updates to the labour laws in Saudi Arabia?

On August 6th, 2024, the Saudi Council of Ministers approved significant amendments to the Labour Law. These updates impact employment contracts, resignation processes, termination policies, leave entitlements, and compliance requirements.

Below is a detailed breakdown of the latest Saudi labour updates in 2025, focusing on key changes relevant to businesses and employees.

Fixed-Term Contracts for Foreign Employees

• Non-Saudi employees must now have written contracts with specified durations.
• Any contract without a stated duration automatically becomes a one-year agreement, effective from the employee's first day of work.
• These contracts renew automatically for the same duration unless otherwise stated.

Resignation Processes: Employer and Employee Rights

• If an employer does not respond to an employee’s resignation within 30 days, it is automatically accepted.
• Employers may delay acceptance for up to 60 days for business needs, but they must provide a written justification before the first 30-day period ends.
• Employees have 7 days to withdraw their resignation unless it has already been accepted.
• During the resignation period, employment contracts remain valid, and both parties must fulfill their obligations.

Termination of Employment: Updated Notice Periods

• For monthly-paid employees:
  • Employees must provide 30 days' written notice before resigning.
  • Employers must provide 60 days' written notice before termination.
  • Postdated resignations are now prohibited, meaning resignations must take effect immediately.
• For non-monthly-paid employees:
  • Both employers and employees must provide 30 days' written notice before termination.
  • Bankruptcy is now a valid reason for terminating employment.

Maternity and Paternity Leave Entitlements

• Maternity leave is now 12 weeks.
• Paternity leave has been updated:
  • Fathers can take up to 3 days of leave.
  • Leave must be used within 7 days of the child’s birth.
• Bereavement leave now includes 3 days for the death of a sibling, in addition to existing bereavement policies.

Workplace Grievances: Employee Rights

• When an employer imposes a penalty, the employee must be notified in writing.
• If the employee refuses or is absent, the notice must be sent via registered mail to the address in their employee file.
• Employees can challenge penalties by submitting a written grievance within 30 days (excluding official holidays).

Overtime Compensation: Paid Time Off Alternative

• Employers may now offer paid time off instead of overtime pay, provided the employee agrees to this arrangement.

Training and Development for Saudi Employees

• Companies are required to develop and implement comprehensive training programs for Saudi employees to enhance workforce skills and compliance.

Probationary Period Regulations

• The probation period is now capped at 180 days.
• A written agreement is no longer required to extend the initial 90-day period.
• Previous exclusions (Eid holidays, sick leave) no longer apply. New regulations will determine which types of leave count towards probation.

Non-Compliance Penalties: Work Permit Renewals & Saudization

• The Ministry of Human Resources and Social Development (MHRSD) can deny work permit renewals for foreign employees if employers fail to meet Saudization requirements.
• Employees affected by non-compliant employers may transfer to another employer without requiring current employer consent.