The amendments, which were approved on 6 August 2024, are expected to come into force 180 days after their publication in the official gazette. The exact publication date is yet to be determined by the Saudi government. Implementing regulations that will provide more clarity on the changes are expected to be released soon.
Background
The amendments were originally released for public consultation in 2020, but their implementation was delayed until 2024 because of the Covid pandemic. The changes aim to enhance employee rights and bring Saudi Arabia up to par with international standards.
Key details
The most relevant changes include the following:
Maternity leave
The amendments increase maternity leave entitlements from 10 weeks to 12 weeks. A minimum of six weeks must be taken immediately after delivery. The remaining six weeks may be taken up to four months prior to the expected delivery date, at the earliest.
Maternity leave will no longer be financed by employers but instead through social insurance.
Female employees remain entitled to extend their maternity leave once by one additional unpaid month (two additional months if the child is born sick or has a disability)
Bereavement leave
Under the amendments, all employees will be entitled to three days of paid bereavement leave in the event of the death of sibling.
Overtime pay
With the employee’s consent, employers will be allowed to provide compensatory paid leave in lieu of overtime pay equivalent to the employee’s hourly salary plus 50 per cent of such salary.
Housing and transportation
Employers will be required to provide their employees with housing and transportation arrangements or pay equivalent cash allowances instead.
Lockton comment: Many employers in Saudi Arabia already offer housing and transportation arrangements or allowances as a supplementary benefit to their employees. As this benefit becomes compulsory, employers will need to determine whether their existing practices meet minimum requirements that will be established by the forthcoming implementing regulations. Those who do not provide such benefits will need be to budget for the additional cost.
Notice period for indefinite term employment contracts
The notice period for termination of an indefinite term employment contract was decreased from 60 days to 30 days for terminations initiated by employees. When the termination of employment is initiated by the employer, the notice period will remain at 60 days.
Probation period
Currently, a probation period may be included in an employment agreement for a duration of 90 days that may be extended once to an additional 90-day period with the employee’s consent.
Under the amendments, employers will be allowed to include a probation period of up to 180 days that may not be renewed. During the probation period, both parties will be entitled to terminate the employment agreement.
Discrimination
Employers are strictly prohibited from discriminating against candidates and employees based on race, age, disability, color, social status, gender, or any other form of discrimination.
Next steps
Employers must review their internal policies and procedures as well as their employees’ employment contracts to ensure proper compliance with the changes.
Lockton Global People Solutions compliance team will monitor the implementation timeline of the changes and update the article once the amendments become effective and the implementing regulations are released.