Labour Law KSA

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1. Employment Contracts & Types in 2025

Digital Contracts Now Mandatory

The Qiwa platform must be used to establish and sign any new employment contracts. To guard against manipulation, these contracts have blockchain verification and AI-powered translation.

Types of Employment Contracts

Full-Time Contracts: Maximum 5-year term with all benefits
Part-Time Contracts: 20-hour work week with proportional benefits
Flexi-Work Visa: New 1-year renewable visa for freelancers
Robot Worker Agreements: First-time regulations for automation

Key Change: The duration of probation was shortened from 90 days to 60 days.

2. Working Hours & Leave Policies in 2025

Working Time Regulations

Standard work week: 40 hours (8 hours per day)
Ramadan hours: Reduced to 6 hours per day
Remote work: Minimum 2 office days per week required

Updated Leave Entitlements

Annual leave: 30 days after 5 years of service
Sick leave: 60 days per year (full pay for first 30 days)
Parental leave:
- Mothers: 14 weeks (increased from 10)
- Fathers: 3 weeks (new in 2025)

Important: Unused leave must be reimbursed within 30 days of resignation.

3. Wages & Benefits in 2025

Minimum Wage Updates

Saudi workers: 4,500 SAR per month
Expatriates: 3,000 SAR per month
Flexi-Workers: 2,200 SAR per month

Mandatory Benefits

Housing allowance: 25% of basic salary
Transport allowance: 10% of basic salary
Tech allowance: 5% for digital upskilling

New Rule: By the fifth of every month, salaries must be paid digitally via WPS.

4. Termination & Dispute Resolution

Valid Reasons for Termination

✔ Performance issues (after 3 written warnings)
✔ Company restructuring
✔ Automation replacement (new in 2025)

Severance Pay Calculation

Under 2 years: 15 days salary per year
2-5 years: 1 month salary per year
Over 5 years: 2 months salary per year

New Protection: Employees have 30 days to use the Labour Court App to dispute terminations.

5. Saudization (Nitaqat) Updates for 2025

Sector-Specific Targets

Healthcare: 45% Saudi workforce
Retail: 50% Saudi workforce
Engineering: 35% Saudi workforce
IT: 40% Saudi workforce

Penalties for Non-Compliance

Red Nitaqat: 3,600 SAR fine per missing Saudi hire
Recruitment ban: 2+ years for repeat offenders

Bonus: Companies who achieve targets are awarded Platinum status.

6. Women's Employment Reforms

Key 2025 Changes

Night shifts allowed in all sectors
Equal pay certification required for large firms
Remote work options for mothers
10% tax discount for companies with 30%+ female workforce

Progress:The percentage of women in the workforce has increased to 37% from 19% in 2016.

7. Regulations for AI & Robot Workers

New 2025 Rules

20% cap on robotic workforce in most sectors
6-month notice before replacing humans with automation
Robot tax: 500 SAR per machine worker monthly

Future Focus: In 2026, UBI experiments for displaced workers will begin.

8. Preparing for Future Changes

2026 Preview

🔹 4-day work week pilot program
🔹 Biometric employment contracts
🔹 Carbon footprint bonuses for green companies

Conclusion: Compliance Checklist for 2025 ➡

✔ Digitize all contracts on Qiwa platform ✔ Meet Saudization targets with monthly tracking ✔ Use WPS payroll for salary payments ✔ Train HR teams on new termination rules

Violation Penalties:Deportation and fines of up to 100,000 SAR are conceivable.

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