Fresh amendments to the labor law

Newly-approved labor law makes changes to foreign worker contracts, maternity leave: Recent amendments to the Labor Law — which the Cabinet approved at its meeting earlier this week — introduced changes to the rules on resignation and termination procedures, extended maternity leave, new rules for calculating overtime, and updated policies for foreign workers' contracts. The amendments go into effect six months after publication in the official Gazette. You can find the full text here (pdf).

Foreign workers’ contracts: If a non-Saudi employee’s contract lacks a specified duration, it is deemed to be one year from the employee’s start date, with automatic renewal for similar terms if the work continues. Previously, the contract duration matched the employee’s work permit period. Also, employers must either provide suitable housing and transportation for their foreign workers or offer appropriate allowances in place of these benefits.

Train up Saudi employees, but don’t necessarily replace foreign workers: Employers are still required to train up and improve their Saudi employees’ skills, but they are no longer required to train them specifically to replace non-Saudi employees.

How resignation + termination is now going to be handled: An employee’s resignation becomes effective either upon acceptance by the employer, after 30 days if unanswered, or after any approved extension up to 60 days. Employees can withdraw their resignation within 7 days unless already accepted by the employer. The contract remains in force during the notice period, and both parties must meet their obligations.

Notice period: For indefinite-term contracts, the notice period for monthly salaries is now 30 days for employees and 60 days for employers, down from 60 days for both parties previously. For non-monthly salaries, a 30-day notice is required from either party.

The legally-mandated leave is now going to run for 12 weeks, up from 10 weeks previously. The law includes a mandatory six-week maternity leave immediately following childbirth, and now allows the remaining six weeks of leave to be taken at the employee’s discretion. Women can begin their maternity leave up to four weeks before their expected delivery date.

Paternity leave: Men are entitled to full paid leave for the birth of their child, within seven days of the birth. The seven-day window was not specified previously.

Overtime calculation: Employers must pay employees 50% more than their basic hourly wage for overtime. Alternatively, with employee consent, they can offer paid compensatory leave instead of extra pay. This provision for compensatory leave is new.