Hire in Saudi Arabia

The following terms must be included in all contracts:

• Details of employer and employee details
• Start date of employment, type and location of work
• Contract duration for fixed-term
• Agreed salary and benefit entitlements
• Annual leave
• Leave rights, including sick leave, and maternity leave for female employees
• Termination rights
• End-of-service gratuity
• For expatriates, employers are obligated to pay fees relating to work permits and visas

In Saudi Arabia, only Saudi nationals are eligible for part-time and flexible work. The General Organization for Social Insurance (GOSI) contributions apply to part-time employees based on GOSI rules.

Here are some important details about part-time contracts:

• There is no probation period for part-time employees.
• Part-time contracts must be in writing and include the number of working hours.
• Part-time employees cannot work for more than 95 hours per month for a single employer.
• The employment relationship for part-time employees must be for a fixed term.
• Part-time employees have the right to refuse work at any time.

Fixed-term employment contracts, including renewals, cannot exceed a maximum duration of four years. Expatriate workers must only be issued fixed-term contracts.

If a fixed-term contract is terminated before its expiration, the party that terminates the contract must compensate the other party an amount equal to the salary for the remainder of the fixed term duration.

If an employer and employee continue with the employment relationship after the expiration of the fixed-term contract – without any agreement on renewal or if the total employment duration exceeds four years – the fixed-term employment contract may be deemed to be an indefinite-term contract.

Employers are legally allowed to conduct background checks during the hiring process but it is recommended they only do so when necessary and after making an employment offer. Prior notice should be given to applicants, letting them know the offer is subject to a background check.

Employers can request references and require medical examinations as part of the hiring process.

In some cases, employers may also require a police clearance letter from applicants regarding their criminal record.

During the probation period, which typically lasts for 90 days, either the employer and employee can terminate the employment contract without prior notice unless otherwise stated in the contract.

If the probationary period coincides with Eid al-Fitr or Eid al-Adha, it may be extended. The probation period can also be extended for an additional 90 days, with the agreement of both parties.

Employees in Saudi Arabia have standard working hours of eight hours per day or 48 hours per week, except during the holy month of Ramadan, when working hours are reduced to six hours per day or 36 hours per week. Fridays are considered paid rest days. Employees should also be given a 30-minute break after working for five hours, which includes time for rest, meals and prayer. Additionally, employees must not be required to stay in the workplace for more than 12 hours in a single day.

However, there are certain circumstances that may require extended working hours of up to 10 hours per day or 60 hours per week, such as annual inventory taking, preparing for seasonal sales or discounts, budgeting, liquidation or to prevent or reduce accidents. These extended working hours must not exceed 30 days in a year.

If an employee works beyond the normal working hours or during national holidays, they are entitled to receive overtime pay. The rate for overtime pay is calculated at 150% of the regular wage. However, an employee’s yearly overtime should not exceed 720 hours.

Employment data should be retained for varying lengths of time, depending on the type of data. Recruitment data should be stored for up to six months, while data relating to maternity or other leaves should be kept for three years. Additionally, data such as employees’ personal records, performance appraisals and employment contracts should be retained for six years from the last date of employment.

For fixed-term contracts, an employee may be dismissed by:

• Non-renewal of the contract at the end date
• Termination as specified in the contract’s terms
• Conversion of the contract to an indefinite term
• Expiration of the work permit (for expatriate employees)

An employer may dismiss an employee for the following reasons:

• Misconduct
• Unauthorized absence
• Failure to perform job duties deemed essential
• Failure to comply with rules for health and safety
• Assaulting the employer
• Disclosure of industrial or trade secrets

The employment relationship can also end by:

• Mutual agreement between the parties, with written consent from the employee
• The employee reaching retirement age
• Force majeure

When dismissal is due to disciplinary reasons, a process must be followed:

• The employee must be notified in writing of the allegation within 30 days of the employer discovering the alleged offense.
• A meeting must be held to question the employee on the allegation and allow the employee to defend themselves.
• Meeting minutes must be recorded and retained.
• If there is a disciplinary sanction, the employee must be notified in writing within 30 days of the employer completing its investigation.

The employer must not terminate employment in the following scenarios:

• The employee is on maternity leave.
• If the employee is on medical leave for up to 180 days resulting from pregnancy or childbirth.
• The employee is out on medical leave but has not yet used their entitlement.

Employment contracts with an indefinite term require a minimum notice period of 60 days for termination. However, if the employment contract specifies a longer notice period, the longer period will apply instead. For employees who are not paid monthly, the minimum notice period is 30 days. Fixed-term contracts require a minimum notice period of 30 days for non-renewal.

An employee is entitled to an end-of-service gratuity instead of severance pay upon termination. The amount of gratuity is calculated based on the employee’s last wage and years of service:

• The gratuity for the first five years of service is half a month’s wage for each year of service.
• For each year of service in excess of five years, the gratuity is one month’s wage for each year.

Employment contracts may contain non-competition clauses, but they must meet certain requirements to be enforceable. The non-competition clause must be in writing and specify:

• The duration of the clause (which cannot be longer than two years from the termination of the employment contract)
• The geographical area where the clause applies
• The type of work the employee is prohibited from engaging in

Although there are no explicit laws for data protection, the Constitution ensures the privacy of individuals and their communications. Surveillance is prohibited except when permitted by law. Moreover, Sharia law allows a person to receive compensation if their personal information has been disclosed without their consent and resulted in a loss.

To ensure that employees receive their wages and entitlements accurately and on time, employers in Saudi Arabia are required to pay all wages and other entitlements in Saudi riyals (SAR) and deposit them directly into the employee’s bank account through a Saudi Arabian bank. The frequency of payment depends on the time-related basis of the employee’s pay, with monthly employees receiving payments at least once a month and daily or weekly employees receiving payments at least once a week.

To enforce this system, employers with five or more employees must register themselves and their employees with the official Wage Protection System (WPS) of the Ministry of Human Resource and Social Development. This system requires employers to submit monthly payroll information online.

There is no statutory requirement for employers to provide employees with payslips. However,it is common practice to do so.

Every employee in Saudi Arabia is entitled to a minimum of 21 days of annual paid leave. However, if an employee has served continuously for at least five years with their employer, they are entitled to a minimum of 30 days of annual paid leave. While employees are permitted to carry over their annual leave entitlement for up to one year with their employer’s approval, it is recommended they take their annual leave in the year it is earned.

Employers are responsible for scheduling annual leave according to the company’s operational requirements. However, they must inform employees of their scheduled leave dates no less than 30 days in advance. While employees cannot demand to receive payment in lieu of their statutory annual leave, an employer must compensate an employee for any accrued leave not taken when their employment comes to an end.

If an employee becomes ill or injured while on annual leave, their annual leave entitlement is suspended. Their absence from work will be counted as sick leave.

Employees are entitled to take a maximum of four months of sick leave per year, as long as they provide a medical certificate to their employer. If an employee has used up all of their sick leave, they may ask to use any remaining annual leave entitlement as sick leave instead.

Entitlement to paid sick leave are as follows:

• First 30 days: full wages
• Next 60 days: 75% of wages
• Final 30 days: the employer is not required to pay

Religious Leave

Employees who are Muslim and have worked with their employer continuously for at least two years are eligible to take a paid leave of 10 to 15 days, which includes the Eid al-Adha holiday. However, to be entitled to this leave, they must not have performed the Hajj pilgrimage previously. Employers may restrict the number of employees who can take Hajj leave during a given year.

Education Leave

Employees who are pursuing a course at an educational institution are entitled to receive paid leave to take any exams and unpaid leave to retake exams. This leave must be applied for at least 15 days before the scheduled exam date.

Employees are entitled to compassionate and bereavement leave as follows:

• Marriage leave: five days’ paid leave
• Death of an immediate relative (child, grandchild, parent, grandparent): five days’ paid leave
• Death of wife – three days’ paid leave
• Death of husband (for non-Muslims) – 15 days’ paid leave
• Death of husband (Muslims) – four months and 10 days paid leave
• Death of husband, if pregnant (Muslim only): Unpaid leave until the birth after four months and 10 days

When requesting the leave mentioned above, the employee should provide the employer with appropriate documentation to support the event.

Maternity Leave

Expectant mothers who are employees are entitled to 10 weeks of fully paid maternity leave from their employer. They must not work for six weeks following the birth and should take no more than four weeks before the expected due date. The employee can decide when to start their leave within these guidelines. After the 10 weeks of paid leave, the employee may take an additional month of unpaid leave.

If the newborn is ill or has a disability, the mother is entitled to another month of paid maternity leave in addition to the unpaid month.

Paternity Leave

Three days’ paid leave.

Nursing Care Leave

Employees are entitled to take one hour of paid leave each day to nurse their child until the child turns two years old. This hour is included in the employee’s working time and they are entitled to be paid for it.

The following public holidays are to be observed by employers in Saudi Arabia:

• Eid al-Fitr — four days (dates variable)
• Eid al-Adha — four days (dates variable)
• September 23 (National Day)

If National Day falls within Eid al-Fitr or Eid al-Adha, employees do not receive an additional holiday. For public holidays that fall on the employee’s usual off day or while an employee is on annual leave, the employee will receive an additional day off.