The Middle East is known for embracing diversity and inclusion, particularly when it comes to talent and technology that align with national initiatives such as Saudi Arabia’s Vision 2030 and the UAE’s Artificial Intelligence Strategy 2031

This International Labour Day, as the world reflects on the value of fair work and dignified employment, the Middle East stands out as a region where progressive labour reforms are converging with rapid digital transformation.

Tech companies—including Amazon, Google, and Microsoft—have recently secured approval from the Saudi Arabian government under new regulations to establish regional headquarters. While they already have a presence in the UAE, establishing offices in KSA further strengthens their footprint across the Middle East. However, this expansion brings with it the responsibility to ensure ethical, compliant, and fair treatment of the region’s workforce.

Amid global tech layoffs and increased scrutiny over workplace practices, there’s a growing need for companies operating in the Middle East to go beyond regulatory checkboxes. Therefore, a need for better strategic approach that helps these global tech firms to build equitable workplaces, foster skilled labour, and avoid missteps that have drawn criticism globally like DEI downfall. 

On this Labour Day, we highlight some preventive measures, compliance strategies, and regulations that tech giants and foreign companies can adhere to and implement in their work policies, to nurture skilled labour and mitigate criticisms similar to those faced globally. 

#1 Comprehensive contract of employment

Both the UAE and Saudi Arabia have implemented significant reforms in their labour laws, especially regarding contracts with skilled workers.

In the UAE, these are governed by Federal Decree Law No. 33 of 2021, while in Saudi Arabia, they are outlined in Royal Decree No. M/51 of 2005.

Foreign companies operating in these countries must adhere to these legal frameworks, which clearly define conditions of employment, including working hours, remuneration, employee rights, contract terms, and legal prohibitions. Compliance with these laws is not only mandatory but essential for establishing transparent and equitable employment relationships.

Employers should provide all employees with clear and comprehensive contracts that outline their rights, responsibilities, and terms of employment. 

Abdulrahman Talha, a Senior HR Manager with Aramco, explains the types of contracts valid in KSA:

• "Full-time Contracts: Fixed-term: Ends on a specific date, renewable up to three times. Indefinite: No end date, can be terminated by either party with notice.
• Seasonal Contracts: For specific seasons like Hajj or tourism, typically lasting 4-5 months.
• Temporary Contracts: For specific projects, lasting up to 3 months, renewable once.
• Casual Contracts: For short-term, unskilled work, lasting up to 15 days.
• Training and Development Contracts: For training programs, typically lasting 3-36 months.
• Flexible Work Contracts: Allowing employees to choose their work hours and location."

He also added that each worker's contract must specify key details such as work hours, salary, benefits, bonuses, working hours—both daily and weekly—annual leave plus additional leave, the rights and duties of both employer and employee, and the conditions for termination of the contract.

Rashid Ahmed, Head of HR at Termigas Bergamo explained the key elements of employment contract in the UAE based on latest amendments. 

In addition to clear and fair emloyment contracts, companies must maintain accurate employment records—documenting working hours, overtime, leave, and benefits. In cases of resignation or termination, records should also include the termination date, reason for departure, and details of any final compensation or benefits paid, ensuring full alignment with local labour regulations.

#2 Implementing fair work policies and a positive environment

The labour laws of the UAE and KSA have undergone significant reforms regarding work policies, including prohibitions against forced labour and discrimination based on gender, race, colour, sex, religion, national or social origin, or disability.

The laws also outline employers’ obligations toward employees, including foreign companies establishing a presence in the region. Such employers must promote equality, diversity, and inclusion, and implement fair work policies as mandated by KSA’s Ministry of Labor and Social Affairs, Department of Labor Relations, and the UAE’s Ministry of Human Resources and Emiratisation.

In particular, for women and young workers, adherence to conventions related to night working hours, forced labour, minimum wage standards, equal remuneration, and fair treatment is crucial.

Additionally, fair policies for women—such as appropriate treatment during pregnancy, mandatory maternity leave, medical expense coverage, and support for overall well-being—should be implemented.

Yasser AlShakweer, Worker Welfare & People Consultant, writes, "Employment practices form the bedrock of worker welfare standards. In Saudi Arabia, aligning these practices with national labor laws is not just about compliance but about fostering a work environment that respects and protects the rights of all employees. By focusing on ethical recruitment and fair employment conditions, businesses can ensure they meet legal standards and contribute positively to the welfare of their workforce."

#3 Understanding the cultural nuances

Foreign companies establishing a presence in the Middle East often encounter socio-cultural challenges, as they may not be accustomed to the region's skillsets and work ethics. While they may initially prefer hiring employees familiar with their own cultural backgrounds and work practices, this approach is not sustainable—especially in light of government regulations that emphasise the hiring of local talent.

Therefore, these companies must make deliberate efforts to recognise and respect the cultural nuances of the region. Understanding local customs and practices can help build stronger relationships with both employees and communities, and also support talent attraction and retention.

When employees feel welcomed in a work culture that acknowledges and supports their cultural backgrounds, norms, expectations, work ethics, and communication styles, it fosters a more inclusive and productive environment.

"Both the UAE and Saudi Arabia are making significant efforts to promote diversity, inclusion, and women's empowerment, which is attracting talent to the region...The quality of life here also plays a major role in this attraction. People work hard, but they also value the balance they can achieve. The weekends provide a real opportunity to recharge, and even after work, there’s still time to enjoy the day. Having that time to relax and recover is crucial, and it’s something many people appreciate." shares Tarik Chebib as he discussed how the Gulf nations are becoming a tech hub, and embracing cultural nuances is the key to attract and retain talent.

#4 Employee well-being and compensation for work-related injuries 

The rising temperatures, worsening weather conditions, and situations like the COVID-19 pandemic brings back attention to workers' health and safety, highlighting the importance of workplace safety regulations and compliances. Therefore, to maintain a sustainable relationship with regional workers and governments, foreign companies must adhere to labour law provisions concerning the health and safety of workers.

Global tech firms should prioritise the well-being of employees by offering health and wellness programmes, flexible work arrangements, and resources for mental health support.

Furthermore, offering comprehensive wellness checks, holistic and inclusive health packages extending to family members, accident coverage encompassing work injuries and occupational diseases, compensation for medical expenses, as well as preventive tools and training, including adherence to the mid-day break rule for frontline workers, are some of the mandatory obligations that employers in the region must abide by.

By prioritising the well-being of their employees and adhering to regulations, especially during challenging times, these companies can foster a positive work environment and avoid legal implications.

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#5 Transparent sponsorship systems

The GCC countries follow a kafala, or sponsorship system, that binds employers and employees in a relationship where the employer provides visas, accommodation, and travel expenses to migrant workers. However, this system also restricts workers' mobility.

To prevent the exploitation of workers, foreign companies must understand the responsibilities associated with sponsorship and fulfil their obligations toward their sponsored employees. This includes providing proper accommodation, ensuring health and safety measures, renewing work visas on time, and offering social security benefits.

Additionally, they should consider hiring expatriates who can blend in or are familiar with the region’s cultural nuances, work ethics, and local languages. Implementing transparent sponsorship systems—especially in regions where sponsorship is required for employment visas—helps ensure that employees are not exploited and are protected under the law.

A Saudi-based Senior Leader Osama M Tunkar writes"As sponsors, we must take responsibility for creating a fair and compassionate work environment for these individuals. It starts with meeting their basic needs. Providing workers with adequate accommodation, healthcare, and access to basic services is essential.

But we must also ensure they are paid a fair wage and not working excessively long hours. These actions not only improve their well-being but also prevent burnout and improve morale."

He explains that being a responsible sponsor needs employers to meet basic requirements such as:

• We must be proactive in addressing any issues of abuse or mistreatment of our workers. This means providing channels for workers to raise complaints and seeking guidance from organisations that specialise in migrant worker rights. It also means working with relevant authorities to address any illegal or abusive practices.
• Empowering our workers is crucial. We can provide them with opportunities for personal and professional development, which can build their skills and confidence and contribute to their overall well-being.
• Encouraging a positive workplace culture that values diversity and inclusivity can also contribute to a more productive and harmonious working environment.

As sponsors, we must acknowledge the power dynamics at play within the Kafala system and use that power responsibly. We must treat our workers with fairness, compassion, and respect. We must provide them with the tools and opportunities they need to succeed, and we must work towards creating a more just and ethical employment system for migrant workers in Saudi Arabia. Let's be fair and compassionate sponsors, and let's make a positive difference in the lives of our workers."

#6 Adherence to national initiatives

Foreign companies expanding their footprint in the Middle East should familiarise themselves with national initiatives related to labour laws, regulations, and economic development strategies. For instance, the Saudization, or Saudi Job Nationalisation Programme, mandated by the Ministry of Labor in KSA, requires companies to prioritise the hiring of Saudi nationals—particularly in the private sector—based on a quota system determined by factors such as company type, industry, and size.

Saudization aims to address employability challenges among Saudi nationals by providing career growth opportunities, closing the skills gap, maximising employability potential, and ultimately contributing to KSA's economic and social sustainability.

Additionally, Vision 2030, a comprehensive plan in Saudi Arabia, focuses on economic diversification, global engagement, and enhancing quality of life. It recognises women as crucial assets for economic growth and development and aims to empower them through various initiatives.

Similarly, in the UAE, the Ministry of Human Resources and Emiratisation (MoHRE) has set Emiratisation targets for 14 private sector industries, as mandated by the Cabinet. Under these targets, companies with 50 or more employees must achieve a 2% annual increase in the hiring of Emiratis in skilled jobs, with the goal of reaching a 10% increase by the end of 2026. In cases of non-compliance, companies may face strict penalties—for example, a firm was fined AED 10 million for faking Emiratization roles.

And the National Strategy for Artificial Intelligence 2031 targets widespread AI adoption and the transformation of industries. This strategy emphasises the importance of developing highly skilled professionals to meet the growing demand for AI-backed job roles and to drive innovation across sectors.

#7 End-of-service gratuity and indemnities payables 

With global tech layoffs on the rise, job security has become a top concern for workers in the Middle East from the very start of their employment.

In the event of termination, employees expect severance pay and associated benefits. Additionally, organisations must provide gratuity or lump-sum payments at the end of the service term, demonstrating their long-term commitment to employees.

The EMEA region is known for employment contracts that include proper severance packages.

In Saudi Arabia, according to Article 105 of the Labour and Workmen Law, employees are entitled to end-of-service awards and indemnities upon termination, calculated based on half or full monthly salary accumulations.

Kiran Babu, an HR Business Partner with WAHL Middle East & Africa explains, "Unless employees are terminated in accordance with Article 80 of the KSA Labour Code, all employees (including Saudi citizens) are entitled to an end-of-service gratuity upon termination of their employment, regardless of the length of their service.

Gratuity is computed in accordance with the following statutory formula:

1. 15 days' pay (base salary and allowances) for every full year of employment during the first five years;
2. one month's pay (base salary and allowances) for each of the first five years of employment.

Resigning employees receive less end-of-service gratuity."

In the UAE, as per Article 51 of the Labour Law, workers are entitled to gratuity for each year of service, calculated based on the last wage (excluding allowances), and must be paid within 14 days of the contract’s end.

Employees with 1–5 years of service receive 21 days' salary per year, while those with more than 5 years receive 30 days' salary per year. However, the total gratuity must not exceed the equivalent of two years’ wages.

Moreover, ensuring that workers’ rights under their employment contracts are respected will also help organisations avoid legal penalties.

This Labour Day, global firms establishing their presence in the Gulf nations must reaffirm their commitment to building fair, compliant, and inclusive workplaces. It's not just about digital transformation, growth, and innovation—they must also strive to be employers that empower, protect, and uplift their people and workplace culture.