For many considering a move to Saudi Arabia, understanding the employment rights in Saudi Arabia can seem opaque. Yet, beneath the surface lies a legal framework with protections that are not just robust, but in some cases, more generous than those found in many Western countries. This guide uncovers seven legally guaranteed rights, codified in the Kingdom’s Cooperative Health Insurance Law and Saudi Labour Law, that might change how you view working in the Kingdom.
Table of Contents
1. Your Health Insurance is Mandatory—and Covers Pre-Existing Conditions from Day One
Employers in Saudi Arabia are legally required to provide cooperative health insurance for all non-Saudi employees, Saudis in the private sector, and their eligible dependents (spouses, sons up to age 25, and unmarried daughters). This is mandated by Articles 2 and 5 of the Cooperative Health Insurance Law.
Furthermore, Article 37 of the same law clarifies that the employer is solely responsible for paying the insurance premiums. But the most significant and reassuring aspect is that there is no waiting period for pre-existing conditions. The law is explicit on this point, as stated in Article 20 of the Cooperative Health Insurance Law:
The provision of benefits upon commencement of the insurance coverage shall include cases originating prior to the commencement of the insurance coverage.
This is a profound benefit, eliminating the uncertainty and risk many expatriates face in other countries where waiting periods for pre-existing conditions can leave them vulnerable. Your coverage begins on day one, offering immediate peace of mind for you and your family.
2. The “End-of-Service Award” is a Guaranteed Severance Payment
Upon the termination of an employment contract, employees are legally entitled to a mandatory severance payment known as the End-of-Service Award (EOSA). This is not a discretionary bonus but a guaranteed financial benefit.
According to Article 84 of the Saudi Labor Law, the award is calculated as half a month’s wage for each of the first five years of service and a full month’s wage for each subsequent year, based on your last received wage.
Counter-intuitively, even employees who resign are entitled to a portion of this award. Article 85 of the Saudi Labor Law stipulates that an employee who resigns receives one-third of the award after 2-5 years of service, two-thirds after 5-10 years, and the full award after 10 consecutive years. This legally mandated benefit acts as a powerful, employer-funded savings vehicle, ensuring that employees, particularly long-term expatriates, leave their tenure with a significant financial cushion that is separate from their personal savings or retirement plans.
3. Your Employer Covers Nearly All of Your Administrative and Relocation Costs
For non-Saudi employees, the financial burden of relocation and administrative processing is significantly reduced by legal mandate. Article 40 of the Saudi Labor Law requires employers to cover a comprehensive list of fees. These include:
- Recruitment costs
- Residence permit (Iqama) and work permit fees, including their renewals
- Fees associated with any profession changes
- Exit and re-entry visa fees
- A return ticket to their home country at the conclusion of the contract
This legal requirement ensures that the primary costs of establishing legal residency and work status in the Kingdom are the responsibility of the employer, not the employee.
4. Strict Protections Govern Both Firing and Quitting
The Saudi Labor Law establishes a clear and strict framework around the termination of employment contracts, protecting both parties from arbitrary decisions.
Employer’s Right to Terminate (Article 80)
Normally, an employer must provide notice and compensation to terminate a contract. However, an employer can dismiss an employee immediately and without these entitlements only for specific, severe causes outlined in Article 80 of the Saudi Labor Law. These include serious infractions such as committing an assault on the employer, being absent without a legitimate reason for more than 30 non-consecutive days in a year, or disclosing the employer’s industrial or commercial secrets.
Employee’s Right to Resign (Article 81)
Conversely, employees have powerful rights to leave their job without notice while retaining all of their legal entitlements. The conditions for this, outlined in Article 81 of the Saudi Labor Law, include situations where the employer fails to meet essential contractual obligations, assigns fundamentally different work without the employee’s consent, or if a serious danger exists in the workplace that the employer has failed to address.
Together, Articles 80 and 81 create a balanced “high bar” for contract termination, discouraging arbitrary decisions from employers while empowering employees to exit professionally from unacceptable work environments.
5. The Arabic Version of Your Contract is Legally Supreme
While employment contracts may be provided in multiple languages for convenience, the law is unequivocal about which version is legally binding. Article 9 of the Saudi Labor Law mandates that Arabic is the required language for all employment contracts, records, and official instructions.
The law leaves no room for ambiguity, stating directly:
If the employer uses a foreign language alongside the Arabic language in any of the aforementioned cases, the Arabic text shall be the prevailing and authoritative version.
The practical implication is clear: it is crucial for every employee to obtain an accurate translation and fully understand the Arabic version of their contract, as it is the sole document that will be upheld in any legal dispute.
6. Your Work Hours and Leave are Generously Defined and Protected
The Saudi Labor Law provides detailed regulations that protect an employee’s time, setting clear limits on working hours and mandating various forms of paid leave.
Working Hours (Article 98)
Standard working hours are defined in Article 98 of the Saudi Labor Law as no more than eight hours per day or 48 hours per week. During the month of Ramadan, these hours are legally reduced for Muslim employees to no more than six hours per day or 36 hours per week.
Leave Entitlements
Beyond daily hours, the law guarantees a variety of leave entitlements under the Saudi Labor Law, including:
- Annual Leave: 21 days, which increases to 30 days after five consecutive years of service (Article 109).
- Marriage Leave: 5 days, fully paid (Article 113).
- Paternity Leave: 3 days, fully paid (Article 113).
- Bereavement Leave: 5 days for a spouse, parent, or child; 3 days for a sibling (Article 113).
- Hajj Leave: 10 to 15 days of paid leave (including the Eid al-Adha holiday) to perform the Hajj pilgrimage once, after completing two years of service (Article 114).
- Maternity Leave: 12 weeks fully paid, which can begin up to four weeks before the expected delivery date (Article 151).
Conclusion: Know Your Rights
Understanding these legally mandated protections is the first step toward advocating for yourself in the workplace. The Saudi legal framework provides a surprisingly detailed and robust set of protections designed to ensure fair treatment, financial security, and personal well-being for employees. With this knowledge of your employment rights in Saudi Arabia, what specific questions will you now ask during your contract negotiation?
