When it comes to running a business in the GCC (Gulf Cooperation Council), compliance isn’t just a box that needs to get checked. It needs to be taken seriously, and HR must remain on top of it as it’s always changing.
There are so many frequent updates to labor laws, evolving Saudization and Emiratization requirements, and stricter payroll regulations like WPS. With all of this, making sure you stay compliant can feel like a full-time job.
And it’s not like being compliant is an option, honestly; it can cost you hefty fines, frozen bank files, blocked visas, and serious damage to your company’s reputation.
The good news? With the right strategies and tools, you can stay ahead of the curve and on top of changes. That’s why we’ve broken down the biggest HR compliance challenges in the GCC for 2025 and given you practical, actionable solutions to tackle each one.
HR compliance in the GCC means making sure your company follows labor laws and government regulations across Saudi Arabia, UAE, Qatar, Kuwait, Oman, and Bahrain. It covers everything from employee contracts and payroll to health insurance, working hours, and end-of-service benefits (ESB).
Failing to comply can result in:
Compliance isn’t just about avoiding penalties; it’s about building a stable, trustworthy business.
Labor laws in the GCC evolve quickly, often with new quotas, payroll rules, and benefit entitlements introduced each year. Staying compliant is important because it:
In short, compliance protects both your business growth and your people.
Here are the 10 biggest HR compliance challenges HR teams in the GCC are facing in 2025, and the best ways to solve them.
Each GCC country regularly updates its labor laws:
Challenge: HR teams managing employees in multiple countries struggle to keep track of constant changes.
Solution:
Governments are prioritizing workforce localization:
Challenge: Missing targets can result in blocked visas or fines.
Solution:
WPS is mandatory for salary transfers across all GCC countries.
Challenge: Delayed or incorrect payroll submissions can freeze company files and block employee visas.
Solution:
ESB is a legal requirement across the GCC, calculated based on years of service and last drawn salary.
Challenge: Manual miscalculations often lead to disputes and legal claims.
Solution:
Companies with employees spread across Saudi Arabia, the UAE, and other GCC countries face multiple sets of labor rules.
Challenge: Managing contracts, payroll, and benefits across borders creates extra complexity.
Solution:
Health insurance is mandatory in most GCC countries, sometimes extending to dependents.
Challenge: Non-compliance can prevent iqama or Emirates ID renewals.
Solution:
Hybrid and remote work arrangements are becoming more common, but laws are still catching up.
Challenge: Defining hours, overtime, and expense reimbursements for hybrid employees is tricky.
Solution:
With digital HR platforms, protecting personal employee data has become a major compliance requirement. Both Saudi Arabia and the UAE introduced new data protection laws similar to GDPR.
Challenge: Mishandling employee data risks fines and reputational damage.
Solution:
Employment contracts are a cornerstone of GCC labor law. Most countries require bilingual contracts in Arabic and English.
Challenge: Missing, outdated, or English-only contracts create legal risks.
Solution:
The GCC has one of the most diverse workforces in the world, with employees from dozens of nationalities.
Challenge: Managing compliance while respecting religious holidays, cultural practices, and different working hours.
Solution:
Use this quarterly checklist to stay on top of compliance:
✅ Review the latest labor law updates
✅ Audit payroll and WPS submissions
✅ Recalculate ESB liabilities
✅ Check Saudization/Emiratization quotas
✅ Renew mandatory health insurance policies
✅ Update employee contracts
✅ Review HR data protection practices
1) What are the biggest HR compliance risks in Saudi Arabia?
Missing Saudization quotas and WPS deadlines are the top risks; both can block payroll and visas.
2) How do I stay compliant with UAE labor law in 2025?
Keep contracts updated to reflect UAE labor law changes, use automated payroll systems, and recalculate ESB correctly.
3) What happens if WPS salary payments are delayed in the GCC?
Penalties include fines, frozen company files, and blocked work visas until compliance is restored.
4) Do companies in the GCC need bilingual contracts?
Yes. Arabic and English contracts are required in most GCC countries for legal validity.
5) How often do GCC labor laws change?
At least once a year, though some changes (like Saudization quotas) can happen quarterly.
HR compliance in the GCC can feel overwhelming, but with the right systems, awareness, and proactive approach, it becomes much easier to manage. By staying up to date on laws, automating payroll and ESB calculations, and building strong internal processes, you can protect your company from fines, keep employees happy, and future-proof your operations.
In 2025, the companies that thrive won’t just keep up with compliance, they’ll stay one step ahead.