Invest in KSA: An Overview of KSA (Saudi) Labor Law

Planning to invest in Saudi Arabia requires one to be knowledgeable about labor laws in order to comply with rules. Saudi Arabia just passed new labor regulations on March 14, 2021, which significantly alter the current legal framework. The main points of this new law are attempted to be covered in this article. It includes fines for labour infractions and the identification of major transgressions and the related penalties.

New Fines for Labor Violations

The Saudi labor law now in effect imposes a number of additional penalties for labour infractions. With these sanctions, working conditions should be improved and worker rights protection strengthened. Employers that disregard the new rules run the risk of paying heavy fines. Lack of formal Contract: Companies who do not give their staff formal employment contracts run the risk of paying fines of up to 20,000 Saudi Riyals ($5,333). Non-payment or delayed payment of wages: Employers who fail to pay their employees' wages on time or at all face fines ranging from 3,000 to 15,000 Saudi Riyals ($800 to $4,000 Working Hour Violation: Employers who go over the legal limit number of hours worked or do not provide their staff the required rest breaks risk fines of up to 10,000 Saudi Riyals ($2,667). Employment Discrimination: Fines of 25,000 to 50,000 Saudi Riyals ($6,667 to $13,333) may be imposed on any company found guilty of discriminating against a worker because of their gender, nationality, or any other protected trait.

Key Labor Violations and Corresponding Fines

To guarantee a just and safe work atmosphere. Knowledge of the main labor infractions and the related penalties under Saudi Arabia's new labor law is crucial. These are some noteworthy infractions together with the corresponding fines:

• Using Foreign Workers Without a Permit : Employers will be fined SR5,000 ($1,333) for employing foreign workers without the necessary work authorization. Learn additional details on Saudi Arabia's IQAMA.
• Health and Safety Infractions : Employers who break government health and safety rules or don't put in place sufficient worker protection measures risk fines of SR1,500 ($400) to SR5,000 ($1,333). This penalty is intended to maintain a secure and friendly workplace for all staff members.
• Poor Support for Childcare : Businesses employing more than fifty people legally have to provide nurseries or other dedicated childcare services. The need of providing assistance to working parents is highlighted by the SR5,000 ($1,333) fine for breaking this rule.
• Employing Minors : It is completely illegal to hire anyone under the age of fifteen. Businesses found breaking this rule will be fined between SR1,000 ($267) and SR2,000 ($533). This action has been taken to guarantee the rights and welfare of young people are protected.
• Postpartum Employment of Women : If a woman starts working less than six weeks after giving birth, she would be fined SR1,000 ($267). The purpose of this law is to protect new mothers' health and welfare at an important time of healing.
• Withholding of Passports :  Companies found to be withholding employee passports or residency permits may be fined SR1,000 ($267). The severe reminder of the need of protecting one's legal and personal rights is provided by this penalty.
• Not Paying Workers :  Not paying workers on the scheduled days may cost you SR300 ($80). The purpose of this law is to prevent any instances of withheld or delayed payments.
• Discrimination based on Gender :Businesses found guilty of treating employees differently based on gender. Either on site or in their job postings. The penalties for discriminating against women is SR3,000 ($800). The need of encouraging gender equality in the workforce is highlighted by this action.

Although investing in Saudi Arabia offers several benefits, it is important to understand and follow the new labor law. Ignoring to do so may cost your company dearly in terms of money and harm its reputation. The priority of worker rights on well-being is ensured by this statute. It maintains adherence and creates a productive and encouraging work atmosphere. All things considered, Saudi Arabia's new labor law shows how committed it is to protecting workers' rights and improving working conditions. Legally infringing employers face fines. Get Saudi Arabian visas, use PRO services, or get unmatched help for your business setup in Saudi Arabia by contacting CIG. Starting here, your prosperity in Saudi Arabia!