Saudi Arabia's new extensive Labor Law: A progressive approach towards Vision 2030

published on 16 September 2024 | reading time approx. 2 minutes

Saudi Arabia's latest labor law amendments introduce sweeping changes to worker rights, resignation procedures, and employee benefits, marking a significant step towards aligning with international standards and supporting the Saudi Vision 2030.

In August 2024, Saudi Arabia’s Ministry of Human Resources and Social Development announced significant changes to its labor law, aiming to modernize the labor market and strengthen worker rights. These amendments, set to take effect 180 days after their publication, impact various aspects of employment, including resignation procedures, probation periods, and employee benefits.

One major change will be the clarification of resignation procedures. Terms such as “termination” or “dismissal” are now clearly defined, with employers having a 30-day period to respond to a dismissal. If the employer does not respond within this timeframe, the resignation is automatically accepted. Employees are also given the option to retract their resignation within seven days.

The probation period can be extended from 90 to 180 days, which gives both parties more time to evaluate new employees or the new employment relationship. Both parties can terminate the employment relationship during this period.

Moreover, employee benefits have been enhanced. Maternity leave has been extended to 12 weeks, and male employees are now entitled to three days of paid paternity leave.

The amendments include new rules for termination, with bankruptcy added as a valid reason for terminating an employment contract. Furthermore, the time frame for employees to challenge disciplinary actions has been extended. Employees now have 30 days to lodge an internal appeal against the disciplinary action.

These changes are part of Saudi Arabia's broader efforts to align its labor market with international standards and support its Vision 2030 goals, which emphasize workforce localization and the protection of worker rights.