Revised Saudi labour laws significantly raise compliance requirements for businesses

As a result, employment experts at Pinsent Masons say that employers and businesses must ensure full compliance with sector specific requirements to avoid financial penalties, reputational harm, and operational disruption.

Saudi Arabia’s Ministry of Human Resources and Social Development’s (MHRSD) ministerial order 112377 revises and reclassifies the schedule of the Saudi Labour Law (50-page / 330KB PDF) violations and penalties. It introduces clearer categories of violations across various business sectors, including general business activities, mining, maritime employment, recruitment companies and offices, domestic workers, agriculture, and unlicensed recruitment.

Dr Sairah Narmah-Alqasim, an expert in KSA employment and incentives at Pinsent Masons, said: “Businesses should treat these amendments as an opportunity to strengthen their internal controls, update HR protocols, and invest in training to ensure full compliance with sector specific requirements. Failure to adapt promptly exposes organisations to financial penalties, reputational harm, and operational disruption.”

The revisions also raise fines for unlawful hiring, improper documentation, and breaches affecting employee welfare. Temporary and casual work arrangements now automatically fall under full labour law protections if the length of those arrangements exceeds 90 days for workers on employment-based visas, regardless of how the contract is labelled, and labour courts gain jurisdiction over these disputes. 

Employers must also adopt or align with a new unified set of workplace regulations that governs working hours, disciplinary rules, benefits of Pinsent Masons said: “The revised schedule of Labour Law violations represents a decisive shift toward greater transparency, accountability, and governance within the Saudi labour market.”

“For employers, the commercial impact is significant: the reclassification of violations eliminates ambiguity, while the increased fines, particularly for illegal hiring, improper employee documentation, and noncompliance with workplace welfare standards, elevate compliance from an administrative task to a strategic risk area,” she said.

“Employer reporting, record-keeping duties and digital compliance have all been significantly expanded or are now mandatory, while Saudization rules, requiring 75% of the workforce to be Saudi nationals, have been maintained with tightened enforcement and restricting certain roles to exclusively Saudi citizens.”