The Saudi Labor Law is one of the key laws that organizes the relationship between employers and workers, whether Saudis or foreigners. It clearly defines the rights and duties of both parties, ensuring fairness and balance in the workplace. This helps maintain a stable labor market in Saudi Arabia and makes it more attractive to investors from around the world.

Objectives of The Saudi Labor Law

1. Regulating the Relationship Between Workers and Employers
This objective forms the cornerstone of The Saudi Labor Law, as it establishes a clear legal framework governing the relationship between workers and employers through a written employment contract. Such a contract specifies all essential aspects of employment, including the nature of the work, working hours, agreed wage and payment schedule, and the duration and conditions of the contract.
By setting these standards, the Law minimizes disputes and exploitation, ensuring that both parties are fully aware of their rights and obligations in advance. In case of conflict, reference is made to the contract or to the Labor Law for resolution.

2. Ensuring a Safe and Fair Work Environment
The Law guarantees the protection of workers’ rights, shielding them from injustice or exploitation. It affirms entitlements such as the right to receive wages on time and the right to work in a safe environment that complies with occupational health and safety standards.
Employers are required to provide preventive measures, training, and protective tools to reduce workplace accidents and injuries. These provisions enhance workers’ confidence and foster a sense of job security.

3. Improving the Efficiency of the Saudi Labor Market
By defining clear rights and responsibilities for both parties, The Saudi Labor Law ensures the smooth functioning of the labor market. Workers are aware of their duties, while employers are bound not to impose obligations beyond what has been contractually agreed.
This clarity enhances discipline and productivity, raising the overall efficiency and competitiveness of the Saudi labor market.

4. Promoting Justice and Transparency
The Law emphasizes fairness and transparency in recruitment and employment practices, prohibiting any form of discrimination based on gender, nationality, or religion. By creating trust between employers and workers, it establishes a more stable workplace environment and encourages foreign talent to contribute to the Saudi economy.

5. Aligning with Saudi Vision 2030
The Saudi Labor Law is dynamic and continuously updated in line with the objectives of Saudi Vision 2030. These reforms aim to increase Saudization by expanding the participation of Saudi citizens in the workforce, while also encouraging greater inclusion of women in various sectors.
Additionally, the Law embraces modern work models such as flexible work arrangements and remote work, making the Saudi labor market more adaptive, competitive, and attractive to foreign investment.

Foreign Labor in Saudi Arabia

The Saudi Labor Law also governs foreign labor, which constitutes a significant portion of the national workforce. Key sectors such as construction, hospitality, healthcare, and domestic services rely heavily on expatriate workers.

This strong dependence on foreign labor has positioned labor laws and employment policies as a central component of the Kingdom’s efforts to restructure the labor market, reduce unemployment among Saudi nationals, and, at the same time, preserve the vital role of expatriate workers as a driving force supporting the national economy.Top of Form

Laws on the Rights of Foreign Workers

The Saudi government has enacted comprehensive regulations to govern the relationship between employers and expatriate workers, aiming to protect the rights of both parties and ensure a fair, balanced, and transparent work environment.

To address common challenges faced by foreign workers—such as unfair dismissal, wage disparities between nationals and expatriates, difficult working conditions in certain sectors, and legal issues arising from the failure to renew residency or employment contracts—the Kingdom has established a robust legal framework.

At the heart of this framework lies the unified employment contract, which clearly defines the rights and obligations of both employers and workers. This contract serves as a reference point in resolving disputes and enforcing compliance with labor laws. Among the most prominent regulations are:

1. Abolishing the Kafala System

The Kafala system previously required foreign workers to remain tied to a single employer (the sponsor) and allowed them to change jobs only with the employer’s consent. Saudi Arabia launched the Labor Reform Initiative to improve contractual relations, effectively abolishing many of the restrictions imposed by the Kafala system.

Under this reform, expatriate workers gained greater freedom to:

- Change employers during or after the contract period, in accordance with specific regulations.

- Exit the Kingdom permanently upon contract termination.

2. Employment Contracts and Rights

Employment contracts are drafted to safeguard the rights of foreign workers, whether the contract is fixed-term or indefinite. Both parties must retain a copy of the agreement, which should include details such as wages, working hours, vacation entitlements, and end-of-service benefits.

3. Settling Labor Disputes

To ensure justice and protect workers’ rights, Saudi Arabia has established specialized labor courts and dispute resolution bodies. These entities address conflicts between workers and employers, including those related to wages, vacation entitlements, or cases of unfair dismissal.

These reforms are designed to strengthen the Saudi labor market, create a more competitive environment among employers, and provide better protection for expatriate workers. The labor system in Saudi Arabia is not limited to protecting nationals but also extends to foreign workers. It goes beyond safeguarding individual rights to reform the labor market as a whole—reinforcing the Kingdom’s position as a leading global investment destination that supports both economic and social development.

How We Can Help?

Whether you are a Saudi national or a foreign worker, an individual or a company, if you are facing challenges or disputes in the workplace, we are here to support you. At Mohammed Al-Khliwi Law Firm, we dedicate our full attention to resolving your issues in the most effective and timely manner.

Contact us and let us handle your legal concerns.

Disclaimer: This content is not legal advice. No liability is assumed. For legal consultation, please contact us.