Saudi Arabia has introduced sweeping updates to its Labour Law enforcement framework, including strict penalties for employers who hire foreign workers without proper permits.
The move, announced by Minister of Human Resources and Social Development Ahmed Al-Rajhi, came into effect immediately on February 25, 2026, and is aimed at strengthening worker protections while ensuring greater stability across the labour market.
Reclassified categories
The amendments reclassify violations into specific categories based on the nature of the activities to provide greater clarity for businesses and workers. These include:
- General violations
- Violations related to mine and quarry operations
- Maritime labour contract regulation
- Operation and maintenance activities
- Recruitment services for human resources and recruitment companies
- Recruitment offices
- Domestic workers regulation
- Advertising controls for supporting labour services
- Unauthorised recruitment of Saudis
What employers must know?
As a general rule, Saudi nationals must account for at least 75% of the workforce. “The Minister may temporarily reduce this percentage in cases of: Lack of qualified Saudi candidates Technical or educational limitations,” it said.
Under the revised schedule, employing a child under the age of 15 in violation of Article 167 of the Labour Law is classified as a serious offence, with fines reaching SR2,000 for establishments employing 50 workers or more.
Employers found retaining a worker's passport or residency permit can face a fine of SR3,000 per worker, under Article (20) of the Labour Law. Additionally, companies that fail to follow the regulations governing the employment of juveniles under Chapter 10 of the Labour Law may be fined SR15,000 per violation.
Companies that employ 50 or more women with at least 10 children under the age of six, are required to provide a nursery or childcare facilities, with non-compliance resulting in an SR3,000 penalty. Failure to grant statutory maternity leave to female employees will also carry a fine of SR1,000 per employee.
Administrative compliance now mandatory
Failing to electronically document employment contracts will lead to employers facing fines of SR1,000 per worker. They must also display working hours, rest periods and shift schedules clearly at the workplace. Furthermore, they are required to report vacancies within 15 days, update hiring outcomes for Saudi candidates within seven days and submit annual workforce data during the month of Muharram. Establishments must update company data within 10 days of any change.
Heavy fines for unauthorised hiring
Lastly, individuals engaging in employment or recruitment of Saudi nationals or foreign workers without proper authorisation face fines of SR200,000 for the first offence, rising to SR220,000 for the second and SR250,000 for the third.
Companies employing 25 or more workers are required to ensure that at least 4% of their workforce comprises professionally qualified persons with disabilities. “Disability may not be a reason for refusal of employment or promotion. Wage discrimination on the basis of disability is prohibited,” said the ministry.
Efforts to improve labour market stability
The ministry invited interested parties to review the amendments on its website while adding that the updated schedule of violations and penalties takes effect immediately. It also noted that it had previously sought public and stakeholder feedback on the amendments through the Istitlaa Public Consultation Platform.
According to the ministry, the decision improves the attractiveness and flexibility of the work environment, ensures labour market growth and improves overall efficiency and sustainability of establishments.
