Saudi Arabia’s recent amendments to its labour law mark a shift towards a more structured, transparent employment environment.
Set to take effect on February 18, 2025, these changes align with the kingdom’s Vision 2030 goals, aiming for a balanced labour market that encourages fair treatment, Saudisation and improved work conditions.
Here, we break down the core changes, their legal and practical impact, and key actions for businesses to ensure compliance.
Heightened regulations for staffing and outsourcing
The amendments bring significant changes to staffing and outsourcing regulations. As the Ministry of Human Resources and Social Development places a new emphasis on regulating companies that supply temporary labour, these businesses face stricter licensing requirements and hefty fines (200,000 Saudi riyals to 500,000 Saudi riyals, the equivalent of $53,000 to $133,000) for non-compliance.
The sectors most impacted include construction, logistics, manufacturing and technology, where temporary labour is heavily relied upon.
Employers need to verify that staffing providers hold the correct licences and that all contract terms comply with the new regulations.
This shift pushes companies to reconsider their approach to workforce management and emphasise hiring through official, licensed channels. It aligns with Vision 2030’s focus on Saudisation, which encourages the hiring of Saudi nationals by making alternative hiring routes and government-backed platforms more prominent.
Failure to comply not only risks operational disruption but can also lead to substantial reputational damage.
Enhanced leave provisions
The new amendments also expand leave entitlements, granting 12 weeks of maternity leave (six of which are mandatory post-birth), three days of paternity leave, and an additional three days of bereavement leave for the death of a sibling.
These changes reflect a progressive shift towards global labour standards, focusing on work-life balance and family support.
Employers should review current leave policies and update employee handbooks to reflect these entitlements, ensuring smooth implementation and avoiding potential conflicts.
Detailed documentation and clear communication of these policies are essential, allowing employees to understand their rights and promoting a supportive workplace culture that aligns with the new legal framework.
Reinforced anti-discrimination and equal opportunity mandates
The amendments introduce stringent anti-discrimination policies, emphasising equal opportunity across hiring and employment. The law now prohibits discrimination based on race, gender, disability, or age, requiring employers to adjust hiring practices and HR policies accordingly.
In sectors historically prone to disparities – such as recruitment, promotion and compensation – companies are now legally obliged to enforce equitable treatment.
This mandate calls for concrete action, including standardised hiring criteria, regular audits of recruitment practices, and clear job descriptions.
Streamlined probation and termination processes
The amendments provide clarity on probationary terms, now allowing a maximum period of 180 days without needing renewal agreements. Additionally, specified-term contracts can now be resigned from before their term, with resignation becoming effective after 30 days without an employer’s response.
These changes align with the kingdom’s Vision 2030 goals, aiming for a balanced labour market that encourages fair treatment, Saudisation and improved work conditions
Jean Abboud,
partner – head of Saudi office, BSA Law
For indefinite-term contracts, the notice period stands at 30 days for employees and 60 days for employers.
These changes simplify contract management, reducing the administrative load for HR teams and ensuring transparency in the employer-employee relationship.
Obligations for housing, transportation and training
The new amendments impose additional responsibilities on employers, specifically concerning housing and transportation allowances, which can either be provided directly or as cash equivalents.
This mandate is particularly relevant for organisations employing a significant number of expatriates, as it aligns with the government’s goal of improving living standards for foreign workers.
Further, employers with 50 or more employees are now required to establish training programmes focused on Saudi nationals. This aligns with Vision 2030’s Saudisation goal, pushing companies to invest in upskilling local talent and reducing dependence on foreign labour.
Companies across all sectors will need to integrate formal training plans and track their effectiveness as part of this localisation effort.
Steps for business compliance
These amendments reflect a deeper commitment to regulatory alignment, presenting challenges and requiring proactive measures from employers. Key steps for businesses include:
- Review staffing contracts: Companies should ensure staffing partners comply with the new licensing requirements to avoid penalties and operational disruptions.
- Update policies and communicate with employees: Employers must update employee handbooks and internal policies to align with the new leave entitlements, anti-discrimination standards, and probation terms, ensuring these changes are effectively communicated to avoid misunderstandings.
- Develop Saudi-focused training programmes: Meeting the new training requirements for Saudi employees is essential for compliance and can contribute positively to talent development within the organisation.
- Maintain thorough documentation: Keeping detailed records of training sessions, leave entitlements, and any contract updates is essential for meeting the regulatory requirements and ensuring smooth audits or reviews by authorities.
Jean Abboud is partner – head of Saudi office at BSA Law
THE BIO
Favourite book: ‘Purpose Driven Life’ by Rick Warren
Favourite travel destination: Switzerland
Hobbies: Travelling and following motivational speeches and speakers
Favourite place in UAE: Dubai Museum
How has net migration to UK changed?
The figure was broadly flat immediately before the Covid-19 pandemic, standing at 216,000 in the year to June 2018 and 224,000 in the year to June 2019.
It then dropped to an estimated 111,000 in the year to June 2020 when restrictions introduced during the pandemic limited travel and movement.
The total rose to 254,000 in the year to June 2021, followed by steep jumps to 634,000 in the year to June 2022 and 906,000 in the year to June 2023.
The latest available figure of 728,000 for the 12 months to June 2024 suggests levels are starting to decrease.
House-hunting
Top 10 locations for inquiries from US house hunters, according to Rightmove
- Edinburgh, Scotland
- Westminster, London
- Camden, London
- Glasgow, Scotland
- Islington, London
- Kensington and Chelsea, London
- Highlands, Scotland
- Argyll and Bute, Scotland
- Fife, Scotland
- Tower Hamlets, London
How to watch Ireland v Pakistan in UAE
When: The one-off Test starts on Friday, May 11
What time: Each day’s play is scheduled to start at 2pm UAE time.
TV: The match will be broadcast on OSN Sports Cricket HD. Subscribers to the channel can also stream the action live on OSN Play.
Specs
Engine: Electric motor generating 54.2kWh (Cooper SE and Aceman SE), 64.6kW (Countryman All4 SE)
Power: 218hp (Cooper and Aceman), 313hp (Countryman)
Torque: 330Nm (Cooper and Aceman), 494Nm (Countryman)
On sale: Now
Price: From Dh158,000 (Cooper), Dh168,000 (Aceman), Dh190,000 (Countryman)
Milestones on the road to union
1970
October 26: Bahrain withdraws from a proposal to create a federation of nine with the seven Trucial States and Qatar.
December: Ahmed Al Suwaidi visits New York to discuss potential UN membership.
1971
March 1: Alex Douglas Hume, Conservative foreign secretary confirms that Britain will leave the Gulf and “strongly supports” the creation of a Union of Arab Emirates.
July 12: Historic meeting at which Sheikh Zayed and Sheikh Rashid make a binding agreement to create what will become the UAE.
July 18: It is announced that the UAE will be formed from six emirates, with a proposed constitution signed. RAK is not yet part of the agreement.
August 6: The fifth anniversary of Sheikh Zayed becoming Ruler of Abu Dhabi, with official celebrations deferred until later in the year.
August 15: Bahrain becomes independent.
September 3: Qatar becomes independent.
November 23-25: Meeting with Sheikh Zayed and Sheikh Rashid and senior British officials to fix December 2 as date of creation of the UAE.
November 29: At 5.30pm Iranian forces seize the Greater and Lesser Tunbs by force.
November 30: Despite a power sharing agreement, Tehran takes full control of Abu Musa.
November 31: UK officials visit all six participating Emirates to formally end the Trucial States treaties
December 2: 11am, Dubai. New Supreme Council formally elects Sheikh Zayed as President. Treaty of Friendship signed with the UK. 11.30am. Flag raising ceremony at Union House and Al Manhal Palace in Abu Dhabi witnessed by Sheikh Khalifa, then Crown Prince of Abu Dhabi.
December 6: Arab League formally admits the UAE. The first British Ambassador presents his credentials to Sheikh Zayed.
December 9: UAE joins the United Nations.
SHAITTAN
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Ferrari 12Cilindri specs
Engine: naturally aspirated 6.5-liter V12
Power: 819hp
Torque: 678Nm at 7,250rpm
Price: From Dh1,700,000
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Killing of Qassem Suleimani
About Krews
Founder: Ahmed Al Qubaisi
Based: Abu Dhabi
Founded: January 2019
Number of employees: 10
Sector: Technology/Social media
Funding to date: Estimated $300,000 from Hub71 in-kind support
The candidates
Dr Ayham Ammora, scientist and business executive
Ali Azeem, business leader
Tony Booth, professor of education
Lord Browne, former BP chief executive
Dr Mohamed El-Erian, economist
Professor Wyn Evans, astrophysicist
Dr Mark Mann, scientist
Gina MIller, anti-Brexit campaigner
Lord Smith, former Cabinet minister
Sandi Toksvig, broadcaster
Key facilities
- Olympic-size swimming pool with a split bulkhead for multi-use configurations, including water polo and 50m/25m training lanes
- Premier League-standard football pitch
- 400m Olympic running track
- NBA-spec basketball court with auditorium
- 600-seat auditorium
- Spaces for historical and cultural exploration
- An elevated football field that doubles as a helipad
- Specialist robotics and science laboratories
- AR and VR-enabled learning centres
- Disruption Lab and Research Centre for developing entrepreneurial skills
Why it pays to compare
A comparison of sending Dh20,000 from the UAE using two different routes at the same time - the first direct from a UAE bank to a bank in Germany, and the second from the same UAE bank via an online platform to Germany - found key differences in cost and speed. The transfers were both initiated on January 30.
Route 1: bank transfer
The UAE bank charged Dh152.25 for the Dh20,000 transfer. On top of that, their exchange rate margin added a difference of around Dh415, compared with the mid-market rate.
Total cost: Dh567.25 - around 2.9 per cent of the total amount
Total received: €4,670.30
Route 2: online platform
The UAE bank’s charge for sending Dh20,000 to a UK dirham-denominated account was Dh2.10. The exchange rate margin cost was Dh60, plus a Dh12 fee.
Total cost: Dh74.10, around 0.4 per cent of the transaction
Total received: €4,756
The UAE bank transfer was far quicker – around two to three working days, while the online platform took around four to five days, but was considerably cheaper. In the online platform transfer, the funds were also exposed to currency risk during the period it took for them to arrive.
What is an ETF?
An exchange traded fund is a type of investment fund that can be traded quickly and easily, just like stocks and shares. They come with no upfront costs aside from your brokerage's dealing charges and annual fees, which are far lower than on traditional mutual investment funds. Charges are as low as 0.03 per cent on one of the very cheapest (and most popular), Vanguard S&P 500 ETF, with the maximum around 0.75 per cent.
There is no fund manager deciding which stocks and other assets to invest in, instead they passively track their chosen index, country, region or commodity, regardless of whether it goes up or down.
The first ETF was launched as recently as 1993, but the sector boasted $5.78 billion in assets under management at the end of September as inflows hit record highs, according to the latest figures from ETFGI, a leading independent research and consultancy firm.
There are thousands to choose from, with the five largest providers BlackRock’s iShares, Vanguard, State Street Global Advisers, Deutsche Bank X-trackers and Invesco PowerShares.
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RESULTS
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The National Archives, Abu Dhabi
Founded over 50 years ago, the National Archives collects valuable historical material relating to the UAE, and is the oldest and richest archive relating to the Arabian Gulf.
Much of the material can be viewed on line at the Arabian Gulf Digital Archive - https://www.agda.ae/en
