Saudi Arabia has announced a comprehensive overhaul of its Labour Law enforcement framework, introducing tougher penalties for employers who violate worker protection regulations. The amendments, approved by Minister of Human Resources and Social Development Ahmed Al-Rajhi, took immediate effect on February 25, 2026, and aim to strengthen the rights of workers while ensuring greater accountability across the private sector.
New Penalty Structure for Employment Violations
Under the revised framework, employers found hiring foreign workers without proper permits will face fines of up to 10,000 Saudi riyals. Retaining a worker’s passport or residency permit, a practice the Kingdom has long sought to eliminate, now carries a fine of 3,000 riyals per affected worker. Employing a child under the age of 15 has been classified as a serious offence, with penalties reaching 2,000 riyals for establishments with 50 or more employees.
Companies that employ 50 or more women with at least ten children under the age of six are now required to provide nursery or childcare facilities, with non-compliance attracting a 3,000-riyal penalty. Failure to grant statutory maternity leave carries a fine of 1,000 riyals per employee affected. The amendments also mandate that companies employing 25 or more workers ensure at least four percent of their workforce comprises professionally qualified persons with disabilities, with wage discrimination on the basis of disability explicitly prohibited.
Administrative Compliance and Documentation
The reforms place significant emphasis on digital compliance. Employers who fail to electronically document employment contracts will face fines of 1,000 riyals per worker. Businesses must also display working hours, rest periods and shift schedules clearly in the workplace. Job vacancies must be reported within 15 days, outcomes of Saudi candidate hiring must be updated within seven days, and annual workforce data submissions are required during the month of Muharram each year.
Individuals or entities engaged in unauthorized recruitment of Saudi nationals or foreign workers face particularly severe consequences, with fines starting at 200,000 riyals for a first offence and escalating to 250,000 riyals for a third violation.
Building a More Sustainable Labour Market
The Ministry of Human Resources confirmed that the amendments were developed following a period of public and stakeholder consultation through the Istitlaa Public Consultation Platform. According to the ministry, the updated regulations are designed to improve the attractiveness and flexibility of the Saudi work environment while ensuring the long-term growth and sustainability of the labour market. The reforms represent another step in the Kingdom’s ongoing effort under Vision 2030 to modernize its workforce regulations and create a competitive, transparent employment landscape that attracts both domestic and international talent.
