Saudi Labor Law Updates 2025: A More Flexible & Fair Work Environment

As part of its efforts to boost the Saudi labor market and align with the goals of Vision 2030, the Ministry of Human Resources and Social Development has introduced a set of major updates to the Saudi Labor Law. These changes officially came into effect in February 2025.

The new labor law amendments are designed to reflect current market needs, protect employee rights, and encourage job creation, especially in the private sector and government-related organizations registered with social insurance. These updates also support working women and aim to make the Saudi workplace more competitive and inclusive. 

A Simple Guide to the New Saudi Labor Law Amendments

Here’s a quick look at the most important changes and how they can positively impact the work environment in Saudi Arabia:

New Legal Terms Introduced ✅ 

Resignation:
A clear and detailed definition of resignation has been added. It must be in writing and free from any pressure. If the employer doesn't respond within 30 days, the resignation is automatically accepted. Employers can delay acceptance for up to 60 days, but must issue a written decision.

Outsourcing:
The term "outsourcing" has been formally introduced, allowing licensed companies to provide qualified employees to work with other businesses, giving more flexibility in workforce management.

Employment Contracts & Documentation 📑 

• All employment contracts must now be digitally documented through the Qiwa platform, and the e-contract is considered the official legal reference.
  
  
• Standardized contract templates are introduced based on job type (permanent, temporary, seasonal, etc.), covering basics like salary, job type, and contract duration.
  
  
  

Rights for Non-Saudi Employees 🌍 

• All contracts for non-Saudi workers must be written and for a fixed term.
  
  
• If no end date is stated, the default contract duration is one year, with an option to renew.
  
  
• Employers are now responsible for paying any penalties caused by delays in renewing residence permits if it’s their fault.
  
  
  

Training and Development 🎓 

• Companies are now required to have a clear training policy in place.
  
  
• Training contracts can also be documented on the Qiwa platform.
  
  
• Trainees are granted similar rights as regular employees, including leave days and compensation.
  
  
• If a trainee refuses to work for the training company afterward, they must either commit to working for the same period as their training or repay the training cost.
  
  
  

Probation Period Rules 🗓️ 

• The probation period is now capped at 180 days (about 6 months). Either party can end the contract during this time without compensation.
  
  
• The probation period can be skipped entirely if both parties agree.
  
  
  

New & Updated Leaves 🗓️ 

• Bereavement leave for the death of a sibling: 3 days.
  
  
• Paternity leave: Fathers get 3 days off within the first week of the baby’s birth.
  
  
• Maternity leave: Now extended to 12 fully paid weeks, including 6 mandatory weeks after birth.
  
  
• If the baby is born with special needs, the mother is entitled to an extra paid month off, covered by social insurance.
  
  
  

Employer Responsibilities🧑‍💼 

• Employers must provide suitable accommodation and transportation, or offer allowances if these aren’t available.
  
  
• Companies must follow the principle of equal opportunity and prevent discrimination of any kind.
  
  
• Any disciplinary complaint from an employee must be answered within 15 days, and the employee has the right to file an appeal within 30 days.
  
  
  

Contract Termination Rules 📃 

For unlimited contracts:

• The employee must notify the employer 30 days in advance.
  
  
• The employer must notify the employee 60 days in advance.
  
  

Termination cases, whether with or without compensation, are now better organized under Articles 74, 77, 80, and 81, giving more clarity and fairness to both parties.

Overtime Compensation ⏱️

Companies can now offer paid time off instead of cash for overtime hours, if agreed upon. This supports a better work-life balance.

How These Changes Help Improve the Saudi Work Environment

These 2025 labor law changes are expected to:

• Improve clarity in the employee-employer relationship.
  
  
• Increase the quality of hiring and employee retention.
  
  
• Encourage more investment in training and development.
  
  
• Provide a more flexible legal framework that supports businesses while protecting employee rights.
  
  

At ZenHR, we’re always up to date with the latest labor law updates in Saudi Arabia. Our all-in-one HR software is designed to help your business stay compliant, efficient, and professional.

All the changes in Saudi Labor Law 2025 have been fully integrated into ZenHR’s system to help ensure your company is always aligned with current regulations.

👉Request a demo today and see how ZenHR can support your team with smart, automated, and compliant HR management.