The Kingdom of Saudi Arabia (KSA) proposed a significant amendments to its Labour Law, effective from February 2025. These changes, aligned with Vision 2030, aim to modernize the labour market, enhance worker protections, and ensure compliance across businesses of all sizes.
Scaled Penalties Based on Company Size
Penalties for labour law violations are now tiered according to company size:
Category A: 50 or more employees
Category B: 21–49 employees
Category C: 20 or fewer employees
This structure ensures proportionality in enforcement and encourages businesses to align their internal policies accordingly.
Emphasis on Preventive Compliance
The amendments shift focus from punitive measures to preventive compliance, especially for small and medium-sized enterprises (SMEs) and first-time infractions. This approach encourages education and proactive adherence to regulations.
Enhanced Focus on Saudization and Worker Protection
Stricter penalties are now in place for violations related to unlicensed hiring, outsourcing, and non-compliance with Saudization targets. Additionally, there’s an increased emphasis on occupational safety, health regulations, and fair treatment of workers.
Implications for Employers
Employers must assess their current practices to ensure alignment with the proposed changes:
Review the proposed schedule of violations to identify potential areas of risk.
Coordinate with HR and operations to assess how current practices align with the draft.
Engage in the public consultation process to provide feedback on the proposed amendments.
With the consultation period closing on June 7, 2025, now is the time to act.
Contact us today to ensure your organization is prepared for these transformative changes.
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