Saudi Arabia’s HR Ministry tightens labour laws

Saudi Arabia has introduced sweeping revisions to its labour enforcement framework, with tougher penalties and tighter compliance obligations for employers across the Kingdom.

The Ministry of Human Resources and Social Development (MHRSD) announced that a revised schedule of Labour Law violations and penalties took effect immediately from February 25, 2026, following a ministerial decision issued by His Excellency Eng. Ahmed bin Sulaiman Al Rajhi.

The updated schedule, described by the ministry as more granular and significantly stricter, forms part of broader amendments to the Labour Law and its Executive Regulations. 

The reforms align with Labour Law changes issued under Royal Decree No. (M/44) dated 8/2/1446H and subsequent executive amendments under Ministerial Decision No. (115921) dated 19/8/1446H.

A more structured violation framework

Under the revised schedule, violations have been reclassified into specific activity-based categories to provide clearer regulatory guidance. These include general violations applicable to all sectors, as well as sector-specific breaches covering:

• Mining and quarrying operations

• Maritime employment contracts

• Operation and maintenance activities

• Recruitment and human resources companies

• Recruitment offices

• Domestic workers and domestic support labour advertising

• Agricultural workers and private shepherds

• Unlicensed recruitment, outsourcing, or employment activities

The ministry said the move is designed to enhance labour market stability, protect workers’ rights, and improve the attractiveness and flexibility of the work environment.

Stricter rules on contracts and employment status

One notable clarification concerns temporary and casual employment contracts.

Labour courts will have jurisdiction over disputes involving temporary, seasonal, and casual workers.

For non-Saudi workers, contracts must remain fixed-term in all cases, even after renewals, and will not convert into indefinite contracts.

Unified work regulations for employers

The ministry has introduced a unified model of workplace regulations, which establishments must adopt or align with. 

The standardized template covers benefits, disciplinary violations, penalties, working hours, grievance procedures, and end-of-service provisions. 

Any internal policy that conflicts with the Labour Law, executive regulations, or ministerial decisions will be deemed void.

Expanded employer reporting obligations

Employers are now required to maintain comprehensive records, either electronically or in paper form, including:

• Employee registers

• Wage and deduction records

• Attendance logs

• Fines registers

• Saudi training records

• Medical examination records

• Individual worker files

They must also display working hours, rest periods, and shift schedules prominently at the workplace.

Additionally, employers must report vacancies within 15 days, update hiring outcomes for Saudi candidates within seven days, and submit annual workforce data during the month of Muharram. Establishments must update company data within 10 days of any change.

Saudization & sector controls

The reforms reinforce Saudization (job nationalisation) requirements. 

“The Minister may temporarily reduce this percentage in cases of: Lack of qualified Saudi candidates Technical or educational limitations,” it said. 

Compliance will continue to be monitored under programs such as Nitaqat, with the ministry empowered to restrict services, suspend recruitment rights, or block visa issuance for non-compliant entities.

Several professions remain restricted exclusively to Saudi nationals, including HR managers, personnel officers, receptionists, cashiers, public relations officers (PROs), and private security guards. Assigning these roles to non-Saudis under alternative job titles is explicitly prohibited.

Worker transfers and wage protection

The updated regulations also detail circumstances under which non-Saudi workers may transfer employers without consent, including prolonged wage non-payment, employer absence, judicial disputes, commercial concealment reporting, or other public interest considerations. 

Recruitment requests may be rejected for delayed wage payments, failure to meet Saudization ratios, misuse of visas, or document falsification. 

Sanctions can include suspension of recruitment for up to five years, cancellation of visas, financial penalties, and referral for criminal prosecution in severe cases such as fraud or commercial concealment.

It also emphasised that no employer can retain any workers documents under any circumstances, “In implementation of Article (20) of the Labour Law: The employer may not retain the passport, residence permit (Iqama), or medical insurance card of a non-Saudi worker without the worker’s consent. 

Inclusion of Persons with Disabilities

Under the revised labour laws, companies employing 25 or more workers must ensure that at least 4% of their workforce comprises professionally qualified persons with disabilities, where the nature of work permits. 

Employers must provide reasonable accommodations, maintain records of adjustments, and avoid discrimination in hiring, promotion, or wages. 

“Disability may not be a reason for refusal of employment or promotion. Wage discrimination on the basis of disability is prohibited,” the Ministry said. 

Digital compliance and enforcement powers

All applications related to recruitment, service transfers, profession changes, reporting, and work regulation approvals must now be processed through the ministry’s electronic platform. Electronic approval or rejection will constitute formal notification.

The ministry has broad enforcement authority, including inspection visits, recording violations, imposing fines under the revised schedule, suspending services, blocking visas, and referring cases to other authorities when required.

Higher penalties for non-compliance

While the full revised penalty schedule outlines detailed per-violation fines, making it crystal clear that labour compliance is now a core operational and financial risk area for businesses in Saudi Arabia.

Beyond monetary penalties, violations may trigger service suspensions, recruitment bans, visa restrictions, workforce transfer approvals without employer consent, and potential criminal liability.

The ministry noted that it had previously sought public and stakeholder feedback on the proposed amendments through the Istitlaa platform before finalizing the changes.

With immediate effect, employers across the Kingdom must reassess their compliance frameworks as Saudi Arabia continues tightening regulatory oversight in pursuit of labour market stability, worker protection, and sustainable business growth.