Saudi Arabia strengthens salary laws to offer protection for workers

KSA’s Ministry of Human Resources and Social Development has introduced stricter salary compliance rules under the Wage Protection Program designed to protect workers, with payroll being monitored to ensure excessively high or low wages are not being paid, and that workers receive their wages on time.

Companies which fail to pay staff for three months or more will have government services withdrawn and employees will be able to leave to work for other firms without their consent. All employment contracts must be digitised, and employers must issue itemised monthly pay slips. All salary disputes must now also be resolved within 15 days of formal notification, and remote and hybrid work arrangements must be documented and registered on the ministry’s platform.

Dr. Sairah Narmah-Alqasim, Riyadh-based employment law expert at Pinsent Masons, said: “The recent updates to Saudi Arabia’s labour law represent a significant shift in employer accountability. With stricter enforcement of wage transparency, digital contract management, and Saudisation training, companies must now treat compliance as a core operational priority.”

The new guidelines come as part of sweeping changes being brought in by the KSA government to ensure the kingdom retains top talent, and that fairness and equity prevails for KSA employees.

The Mudad platform will monitor wage compliance across companies, and flag up when breaches have occurred, such as more than 50% of a worker’s wage being deducted, no salary recorded for more than 90 days, or a lack of official records.

Companies must submit salary files within 20 days of the due date. Failure will trigger inspection visits. Companies will also have only 10 days to justify delayed payment, with sanctions kicking in after two months.

“These reforms are not just regulatory, they’re a signal of the Kingdom’s commitment to modernizing its labour market and protecting worker rights,” said Luke Tapp, Middle East employment expert at Pinsent Masons.

“Employers who adapt swiftly will not only avoid penalties but also position themselves as attractive destinations in the current war for top talent in the Kingdom.”