Saudi Labour Law Updates 2025

Saudi Labour Law Updates in Q2  

Labour Law Reforms in Early 2025 

In Q2 2025, the Ministry of Human Resources and Social Development (MHRSD) rolled out a new wave of labour law amendments, reinforcing protections for employees and formalizing key employer obligations. These updates build on earlier regulatory shifts and signal the Kingdom’s continued effort to modernize workplace practices. 

Key highlights: 

• Maternity leave extended to 12 weeks (6 weeks postnatal mandatory) 

• Paternity and bereavement leave introduced (3 days each) 

• Probation period extended to 180 days, allowing termination without notice from either party 

• Mandatory digitalization of all employment contracts via Qiwa 

• Structured notice periods for resignations and terminations 

• Wage disputes now subject to enhanced enforcement mechanisms 

Impact: Employers must review and update internal policies, digitize contracts via Qiwa, and ensure leave entitlements and termination processes are clearly documented. Proactive action reduces legal exposure and improves employee relations. 

2. 30-Day Grace Period for Expired Visit Visas Facilitates Final Departure 

On 26 June 2025 (1 Muharram 1447 AH), the General Directorate of Passports (Jawazat) launched a 30-day grace period for individuals with expired visit visas to regularize their departure without penalties. 

Key details: 

• Applies to all visit visa categories 

• Strictly for final departure, not renewal 

• Requests must be submitted via Absher’s Tawasul service 

• Visa holders must pay outstanding fines and exit within 30 days 

Impact: Employers should inform short-term visitors and assist with compliance before the grace period ends, after which penalties will resume. 

3. Saudi Arabia Approves National Policy to Eliminate Forced Labour 

In January 2025, the Saudi Cabinet approved the National Policy to Eliminate Forced Labou the first of its kind in the Gulf region. It aligns with ILO Convention No. 29 and its 2014 Protocol. 

Key focus areas: 

• Promoting decent work and non-discrimination 

• Ensuring transparent recruitment 

• Providing victim-centered support 

• Strengthening coordination across government agencies 

Impact: Employers should adopt fair hiring practices, maintain clear contracts, and implement grievance mechanisms to align with the policy and reduce compliance risks. 

4. New Social Security Law: Contribution and Retirement Reforms 

On 3 July 2025, the General Organization for Social Insurance (GOSI) introduced a new law restructuring retirement ages and contribution rates. 

Three employee categories: 

• New hires (post July 2024): Retirement age set at 65; contributions rise 0.5% annually (up to 2%) 

• Employees under 50: Retirement age gradually increases to 65; contribution rates remain unchanged 

• Employees 50 and above: Continue under the current system 

Impact: Employers must upgrade payroll systems and monitor employee categories to ensure compliance and long-term planning accuracy. 

Saudi Labour Law updates Q1 

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.