As Saudi Arabia modernizes its labor market, compliance with the Labour Law (Royal Decree No. M/51) is essential for employers and recruitment firms. Whether you’re hiring Saudi nationals or expatriates, Capstone Solutions ensures legal alignment in every recruitment process.
Key Legal Provisions with Article References
- Employment Contracts & Types
- Article 50–52: Contracts must be written, include wage, job role, duration, and must be signed in duplicate.
- Article 55: Fixed-term contracts become indefinite after 3 renewals or 4 years.
- Article 37: Expatriates must have a fixed-term contract only.
- Probation Period
- Article 53: Max 90 days, extendable to 180 days with written consent.
- Article 54: A worker may only be under probation once, unless switching roles or after a 6-month gap.
- Termination & Notice Period
- Article 75: 60 days’ notice for monthly-paid staff; 30 days for others.
- Article 77: Compensation if termination is unjustified—15 days’ wage/year for indefinite contracts.
- Article 80: Outlines just causes for termination without benefits.
- Article 81: Workers may leave without notice for justifiable employer misconduct.
- End of Service Benefits
- Article 84: ½ month wage/year for first 5 years, 1 month/year thereafter.
- Article 85–87: Partial benefit for resignation; full benefit if over 10 years or due to force majeure.
- Working Hours & Overtime
- Article 98: Max 8 hours/day, 48/week (Ramadan: 6/day for Muslims).
- Article 107: Overtime paid at 150% of hourly wage.
- Article 104: 2 rest days per week (Friday is standard, can be substituted).
- Leave Entitlements
- Article 109: Annual leave of 21 days (30 days after 5 years).
- Article 117: Sick leave – 30 days full pay, 60 at ¾ pay, 30 unpaid.
- Article 151: 10 weeks maternity leave, nursing breaks included (Article 154).
- Article 114: Hajj leave (once after 2 years of service).
- Recruitment Agencies & Licensing
- Article 30–31: Only licensed firms may recruit Saudis or foreign workers. Workers are directly tied to employer contracts.
- Employment of Non-Saudis
- Article 33–40:
- Must obtain work permit & residency (Iqama).
- Employers bear all related costs, including repatriation.
- Workers may not work for others or change professions without legal steps.
- Saudization Requirement
- Article 26: All companies must maintain at least 75% Saudi staff, unless exempted.
- Health, Safety & Welfare
- Articles 121–125: Employers must ensure a safe, clean, and hazard-free work environment, at no cost to workers.
How Capstone Solutions Ensures Legal Recruitment in Saudi Arabia
- Compliance-Driven Hiring: All contracts, permits, and benefits aligned with Saudi Labour Law.
- Licensed Services: We recruit within legal guidelines (Article 30).
- End-to-End Support: From documentation to onboarding and Saudization consulting.
