Saudi Labour Law Updates 2025

Staying current with Saudi labour laws and regulations is essential for businesses operating in or entering the Kingdom. The Ministry of Human Resources and Social Development (MHRSD) has introduced a series of legal updates that came into force in the first quarter of 2025. These updates aim to strengthen employee rights, enhance employer accountability, and simplify compliance.

This blog outlines the key labour law changes issued in Q1 2025, highlighting their practical implications for employers and HR professionals. We explore the major changes and what they mean for businesses, employees, and international companies operating in the Kingdom.

Saudi Labour Law Updates in Q1 2025

In this section, we cover the most notable employment law changes that took effect in Q1 2025, based on official updates issued by MHRSD.

The following ten updates are central to the 2025 labour reforms and represent a significant shift in how employment is governed in Saudi Arabia. These updates aim to streamline HR operations, enforce legal protections for workers, and enhance the ease of doing business for local and international companies. Together, they signal a decisive move toward international HR best practices and improved employer-employee relations, backed by digital platforms like Qiwa and regulatory oversight from the MHRSD:

1. Resignation Procedures

Employees may resign from fixed-term contracts. Employers have 30 days to respond, after which the resignation is automatically accepted. Withdrawal is allowed within 7 days.
Impact: Ensures transparency in voluntary exits and reduces ambiguity for employers and HR teams managing offboarding.

2. Extended Probation Period

The probation period now extends to 180 days, during which either party can terminate without notice.
Impact: Offers both parties sufficient time to assess compatibility and performance while minimizing risk during onboarding.

3. Overtime, Allowances, and Pay Slips

Employers may offer compensatory leave instead of overtime pay (by agreement). Wage transparency rules require itemized monthly pay slips.
Impact: Gives employees full visibility of earnings while supporting employer-led compensation flexibility under cost-control strategies.

4. New Termination Grounds

Bankruptcy is a valid reason for termination. Employees now have more time to respond to disciplinary actions.
Impact: Balanced legal protection and employer safeguards.

5. Leave Entitlements Updated

• Maternity leave extended to 12 weeks (6 weeks postnatal mandatory)
• New paternity leave: 3 paid days
• Bereavement leaves: 3 days for sibling loss
  Impact: Improved family support policies.

6. Anti-Discrimination & Remote Work Compliance

Discrimination based on personal status is prohibited. Remote/hybrid work must be documented and registered on Qiwa.
Impact: Promotes equity and transparency in flexible work.

7. Saudization and Training

All businesses must train Saudi employees regardless of company size. Non-compliance may result in permit suspensions or employee transfers.
Impact: Stronger local workforce development.

8. Notice Periods

• Employees: 30 days for resigning from indefinite contracts
• Employers: 60 days for terminations
• Resignation withdrawal allowed within 7 days (if not yet accepted)
  Impact: Structured and fair contract termination.

9. Grievance and Digital Contracting

Disciplinary notices must be in writing. Employees have 30 days (excluding holidays) to file grievances. All contracts must be uploaded to Qiwa to be valid.
Impact: Legal consistency and digital transparency.

10. Wage Disputes and Enforcement

Employers are now required to settle wage-related disputes within 15 days of formal notification. New enforcement tools allow MHRSD to impose fines or restrict business services in the event of non-compliance.
Impact: Stronger enforcement mechanisms and faster employee recourse.

How Employers Can Prepare for the New Labour Landscape

To ensure alignment with the 2025 Labour Law updates and avoid compliance risks, employers should:

• Review of employment contracts and HR policies
• Implement formal resignation and termination procedures
• Digitize contracts via Qiwa
• Document remote work policies
• Offer itemized pay slips
• Launch Saudization-compliant training programs and track participation

Frequently Asked Questions (FAQs)

1. When do the new laws apply? 19 February 2025
2. Can employers terminate during probation? Yes, without notice
3. What if no response to the resignation? It's automatically accepted after 30 days
4. Have gratuity rules changed? No
5. Must housing/transport be provided? Or an equivalent allowance must be paid
6. Are digital employment contracts mandatory? Yes. All contracts must be legally binding and submitted through Qiwa.

What Else Employers Should Know

It’s important to note that Qiwa now serves as the central digital hub for all employment contract registration, remote work declarations, Saudization reporting, and more. Employers must also align with the Human Capability Development Program to support the upskilling of Saudi talent in compliance with national quotas.

Conclusion

Staying proactive under the 2025 legal framework is not just about avoiding risk—it’s a strategic advantage. Businesses that adapt early will be better positioned to attract talent, meet Saudization goals, and maintain smooth operations in a competitive landscape. For employers, employees, and investors, this means more clarity, stronger protection, and alignment with global standards.

Partner with TASC Outsourcing for Strategic Labour Law Compliance

If you're navigating labour law reforms or expanding your business operations in Saudi Arabia, partnering with a trusted HR compliance expert can make all the difference. TASC Outsourcing brings over 17 years of experience in workforce strategy, regulatory alignment, and payroll management across the GCC.

We assist organizations with:

• Labour law compliance and Qiwa onboarding
• HR audits, documentation, and policy reviews
• Employee outsourcing and Saudization support

Contact TASC Outsourcing today and let us support your success under the new legal framework. With 17+ years of HR expertise in the region, we help companies align with Saudi employment laws and scale efficiently.