For foreign workers in Saudi Arabia, understanding the Saudi labor laws for expatriates is essential. From work contracts and working hours to leave entitlements, end-of-service benefits, and termination rules, this guide outlines key protections and obligations under Saudi labor regulations. It also explains how new reforms affect the sponsorship system, visa transfers, and workplace rights.
Saudi Labor Laws for Expatriates – Legal Framework Overview
The Saudi labor law for expatriates is governed by Saudi Arabia’s Labor Law (Royal Decree M/51) and related texts, which ensure workplace protections, fair contracts, and clear employer obligations in foreign employment settings.
Key Principles Under Labor Law for Expats
These laws require fixed-term contracts, regulated working hours, salary protection, health and safety standards, and dispute resolution. They also cover rights to leave, penalties, and end-of-service benefits for foreign employees.
Expat Work Contract Saudi Requirements
The expat work contract Saudi defines the rights and duties of both employer and expatriate worker.
Mandatory Elements of Work Contract
Contracts must include job title, salary, working hours, probation period, employer details, and visa sponsorship. Both parties must sign before Iqama issuance.
Fixed-Term vs Unlimited Contracts
Expats generally work under fixed-term contracts (typically one year, renewable). Unlimited contracts are rare and must be clearly documented in writing.
Saudi Working Hours Expatriates and Overtime Regulations
Saudi laws define maximum working hours and overtime rules for foreign workers.
Standard Workweek and Rest Requirements
The standard working week is 48 hours (6 days, 8 hours) or 24 hours fasting months. Employers may schedule Friday as a day off, with rest periods.
Overtime Pay and Sunday Work
Overtime must be paid at 150% of basic salary for up to 9 hours daily. Work on official holidays earns 200% or rest days plus compensation.
Saudi Leave Entitlement for Expatriates
Expatriates enjoy mandatory leave benefits under expat leave entitlement Saudi labor law.
Annual and Public Holiday Leave
Employees accrue 21 days paid annual leave, increasing to 30 days after five years. Leave extends around public holidays under Saudi law.
Sick and Maternity Leave Rights
After 90 days of service, expat workers qualify for 30 days paid sick leave per illness instance. Women are entitled to ten weeks of paid maternity leave.
End of Service Benefits for Expatriates in Saudi Arabia
Upon termination, expats are entitled to end-of-service benefits Saudi expatriate workers.
Calculating Gratuity Payments
Workers earn indeterminate or fixed-term gratuities: half a month’s salary for first five years and full month’s salary after each subsequent year.
Deductions and Forfeiture Provisions
Benefits are lost only in cases of gross misconduct or contract breach (e.g., absconding, fraud). All other lawful resignation or termination cases qualify.
Saudi Visa Transfer in Labor Law
Recent reforms have simplified visa transfer in Saudi labor law for expatriate job changes.
No-Objection Certificate (NOC) Removal
Under new rules, NOC is no longer needed in most sectors. Workers with expiring contracts can transfer immediately without sponsor consent.
Change of Employer Process
New employer initiates transfers via Qiwa or Absher. Once approved, new contract and Iqama replacement follow without prior exit or exit permit.
Termination Rules for Expatriates in Saudi Laws
Both employers and employees face defined rules under expat termination rules Saudi labor law.
Constructive vs Mutual Termination
Fixed-term contracts end at expiry. Termination mid-term requires 60 days’ notice or payment in lieu. Mutual termination mandates written agreement.
Unlawful Dismissal and Remedies
Dismissal for discriminatory reasons entitles worker to compensation. Grievances are filed at labor offices, with binding resolutions after arbitration.
Saudization and Expatriate Worker Quotas
Saudi labor law mandates Saudization and expat quotas—impacting foreign worker hiring.
Nationalization Program (Nitaqat System)
Employers must match workforce quotas based on company size. Failure results in penalties and visa restrictions for expats.
Exemptions and Sponsorship Variations
Some businesses or sectors (e.g. small firms, investment licences) are partially exempt and allowed limited expat work permits.
Saudi Health and Social Insurance for Expatriates
Healthcare and social benefits are governed under expat health insurance Saudi law.
Medical Insurance Obligations
Employers must secure private health insurance for expats and dependents. Government hospitals are not always free for foreign employees.
Social Security and GOSI Enrollment
Saudi citizens enroll under GOSI; expatriates may also be enrolled depending on job type or sector (notably, multinational staff or private professionals).
Grievance and Dispute Resolution Under Saudi Expat Labor Law
The law provides structured dispute avenues.
Filing Complaints with Labor Courts
Workers can file online complaints via Qiwa or local labour offices. Arbitrators mediate, then labor courts rule if unresolved.
Role of Ministry of Human Resources (MHRSD)
MHRSD oversees employer compliance, imposes fines for violations, and facilitates worker protection and rights enforcement.
Rights to Terminate or Resign for Expatriates
Saudi labor law gives expats legal options to resign.
Voluntary Resignation Procedures
Workers must give 60 days’ notice or pay compensation. Final settlement arrangements and travel exit processing must occur lawfully.
Return or Exit Permits Post-Resignation
Former employers no longer control exit visas; worker can request sponsor transfers or exit through new employer.
Probation Period and Performance Evaluation for Foreign Workers
Under Saudi law, expats often undergo probation.
Length and Renewal of Probation
Probation may not exceed 90 days. If performance is unsatisfactory, employer or employee may terminate without end-of-service payment.
Confirmation after Probation
Successful completion triggers confirmation letter. Then full labor rights—leave, gratuity, termination protection—apply.
Compliance Tips for Expats and Employers under Saudi Labor Law
Practical advice to stay compliant and protected.
Maintain a Clear Written Contract
Ensure contract terms match actual job conditions, and keep signed copies alongside licence references.
Track Work Hours and Payslips Accurately
Wages should be paid timely via bank transfer. Keep payslips, overtime records, and leave balances clearly documented.
Use Official Platforms for Visa and Contract Changes
Qiwa and Absher portals reflect official status—rely on them for transfers, resignations, and complaint filings.
Conclusion
Understanding Saudi Labor Laws for Expatriates empowers you to work confidently. These laws protect your rights—covering salary, leave, Iqama transfer, termination, and benefits like gratuity. Reforms like the removal of NOC and new visa rules simplify mobility. Employers must also comply with Saudization and healthcare insurance requirements. For smooth compliance, dispute avoidance, and planning your tenure in KSA, stay informed and keep proper documentation. Employers and workers should consult official sources or legal experts to ensure accuracy.
If you want expert support for employment contracts, visa transfers, or implementing best practices, consider working with specialized Business Setup Consultants in Saudi Arabia.
FAQs
Can expatriates transfer sponsors without NOC under current Saudi labor law?
Yes. Under recent reforms, many expats can transfer sponsors without employer NOC after contract expiry or probation.
How is end-of-service benefit (gratuity) calculated in Saudi?
Gratuity is calculated as half-month’s salary for first five years and full month thereafter, based on continuous service.
Are overtime hours payable for expats in Saudi?
Yes. Overtime pay must be at least 150% of salary, and 200% on rest days or holidays.
How much annual leave do expat workers get?
They receive 21 days paid leave per year, increasing to 30 days after five years of service.
Is medical insurance mandatory for expatriates?
Yes. Employers must provide valid health insurance for expatriate employees and their dependents.
What is Saudization and how does it affect expat labor?
Saudization mandates inclusion of Saudi nationals in company workforce. Exceeding quotas may restrict expat hiring or visa issuance.
How long is probation for expatriate employees in Saudi?
Probation may not exceed 90 days. During this period, termination is allowed without notice or benefits.
Can I resign and exit without employer permission?
Yes. After resignation and Iqama transfer or exit permit issuance, the worker can leave without needing sponsor’s permission.
What if wages are delayed or withheld?
Workers can file complaints via Qiwa. If owed wages are confirmed, the employer is penalized and payment ordered.
Are there restrictions on expat contract terms?
Yes. Contracts must meet minimum standards under labor law, including wage, job title, working hours, and leave entitlements.
