Saudi Labour Law 2026 Updates: What Employers Need to Know
Saudi Arabia’s labour market is undergoing unprecedented transformation under Vision 2030. The Ministry of Human Resources and Social Development (MHRSD) has introduced significant amendments to the Saudi Labour Law, alongside updates to digital platforms such as Qiwa, Nitaqat, and the Wage Protection System (WPS). This guide provides a comprehensive overview of the Saudi labour law 2026 updates and their implications for employers.
Overview of the 2026 Amendments
The 2026 amendments to the Saudi Labour Law (Royal Decree M/51) build on earlier reforms to create a more flexible and transparent employment environment. Key objectives include:
- Enhancing job security for Saudi nationals under Saudisation (Nitaqat) programmes.
- Modernising working arrangements, including part-time, temporary, and remote work.
- Strengthening enforcement of the Wage Protection System (WPS).
- Reducing labour disputes through clearer termination and redundancy rules.
- Aligning with international labour standards and Vision 2030 targets.
Key New Provisions
| Provision | Previous Rule | 2026 Update | Impact |
|---|---|---|---|
| Employment contract types | Unlimited-term contracts default | Fixed-term contracts default; unlimited-term phased out over five years | Fundamental shift; aligns with GCC trends |
| Probation period | Up to 90 days | Up to 180 days; employer must give 14 days’ notice to terminate | Extended trial period, but more process |
| Non-compete clauses | Enforceable for up to two years | Maximum twelve months; must be “reasonable” in scope and geography | Greater restriction on employers |
| Remote work | Not explicitly regulated | Formal framework for hybrid and fully remote roles; employer must provide equipment | New compliance obligations |
| Part-time and temporary work | Limited regulation | Distinct contract templates and contribution calculations for part-time/temporary staff | Greater flexibility with clear rules |
| End-of-service benefit portability | Not available | Employees can transfer accrued benefits between approved employers and sectors | Improved labour mobility |
Qiwa Platform Updates
Qiwa, the MHRSD’s integrated digital platform for labour market services, plays an increasingly central role in compliance. The 2026 updates introduce mandatory Qiwa workflows for:
- Contract registration – All employment contracts (including part-time and temporary) must be registered on Qiwa within five working days of signing.
- WPS verification – Salary payments must be confirmed via Qiwa within 48 hours of the WPS payment date.
- Leave management – Annual leave, sick leave, and other absences must be recorded and approved in Qiwa in real time.
- Training records – Mandatory upload of employee training certificates related to occupational safety and compliance.
- Digitised termination – All terminations must be processed through Qiwa, with digital signatures required from both parties.
Nitaqat Changes
Nitaqat, the Saudisation classification system, has been restructured to better reflect genuine employment of Saudi nationals.
| Nitaqat Band | Previous Saudisation Threshold | 2026 Threshold | Consequences of Non-Compliance |
|---|---|---|---|
| Platinum | > 10% of workforce | > 15% of workforce | All benefits, simplified visa processing |
| High Green | 6–10% | 10–15% | Standard benefits, visa privileges |
| Low Green | 2–6% | 5–10% | Moderate benefits, visa caps apply |
| Yellow | 0.5–2% | 1–5% | Visa restrictions, 12-month ban on new work visas |
| Red | < 0.5% | < 1% | Full visa suspension; no renewals for expat employees |
Note: Thresholds vary by economic activity and region. The figures above are illustrative for the “Wholesale and Retail” sector. Employers should check their specific Nitaqat banding on Qiwa.
Wage Protection System Updates
The WPS remains a cornerstone of Saudi labour compliance. The 2026 updates introduce stricter enforcement measures.
- Payment window – Wages must be paid within three days of the contractual due date (down from seven).
- Non-cash ban – All wages must be paid through bank accounts; cash on delivery is no longer permissible.
- Monthly filing – Employers must file WPS reports within five days of the pay date; late filing attracts a progressive penalty.
- WPS fines – First violation: SAR 5,000 per employee. Second violation: SAR 10,000 per employee plus a ban on new visa issuance for six months. Third violation: SAR 20,000 per employee plus visa suspension and business classification downgrade.
Leave and Working Hours
The 2026 amendments update leave entitlements and working time provisions.
Annual leave – 21 working days per year (increasing to 30 after five years of service). Unchanged but carry-over limited to 12 months.
Sick leave – 120 days per year: 30 days at full pay, 60 days at 75 per cent pay, 30 days unpaid (restructured from the previous 90-day model).
Maternity leave – Ten weeks at full pay (increased from nine). Adoption leave: seven weeks at full pay (new provision).
Paternity leave – Five working days (up from three).
Working hours – Standard 48 hours per week. No changes to the cap, but overtime rules now specify that the 150 per cent rate applies from the first hour of overtime (previously after two hours).
Termination Provisions
Significant changes to termination rules aim to reduce litigation and provide clearer pathways for both parties.
- Notice period – 30 to 90 days depending on the employee’s salary band. Notice must be in writing with reasons.
- Summary dismissal – List of grounds expanded to include breach of cybersecurity policy and data protection violations.
- Redundancy – Employers must notify MHRSD 90 days before any collective redundancy (20+ employees). A mandatory redeployment plan is required.
- Unfair dismissal – Compensation cap raised to six months’ salary. Filing window: 30 days from termination.
- Final settlement – Must be paid within five working days of termination (down from fourteen).
Penalties for Non-Compliance
| Violation | Fine (SAR) | Additional Sanctions |
|---|---|---|
| Failure to register contract on Qiwa | 10,000 per employee | Visa processing suspension |
| WPS non-compliance (first offence) | 5,000 per employee | Warning letter |
| WPS non-compliance (third offence) | 20,000 per employee | Visa ban + classification downgrade |
| Failure to meet Nitaqat threshold | Variable | Visa restrictions, renewal ban |
| Discrimination or harassment | 100,000–500,000 | Potential imprisonment |
| Employing undocumented workers | 25,000 per worker | Deportation costs, business closure |
| Non-compliance with Saudisation fines | 9,000 per month per unfilled role | Ban on expat recruitment |
Implementation Timeline
- January 2026 – Contract type reforms, probation changes, and remote work framework take effect.
- March 2026 – Qiwa workflow mandates become enforceable; WPS reporting window reduced.
- June 2026 – Nitaqat threshold adjustments apply; new leave provisions commence.
- September 2026 – Enhanced penalty framework and termination provisions in force.
- December 2026 – Full compliance review; MHRSD audit campaign launched.
Frequently Asked Questions
Do the 2026 amendments apply to all industries in Saudi Arabia?
Yes, unless a sector-specific law (e.g. for domestic workers, agricultural workers, or certain public-sector employees) provides otherwise. The amendments apply to all private-sector employers regulated by the Saudi Labour Law.
What happens if I do not register a contract on Qiwa within five days?
A fine of SAR 10,000 per employee applies. Repeat offences within twelve months result in visa processing suspension. Qiwa registration is now a prerequisite for WPS filing and visa issuance.
Can I still hire expatriates under the new Nitaqat thresholds?
Yes, but the bar is higher. Employers must achieve a minimum of 5 per cent Saudisation (in most sectors) to remain in the “Low Green” band. Yellow and Red bands face progressive visa restrictions. Consider engaging a Nitaqat specialist to plan your workforce mix.
How does the end-of-service benefit portability work?
Employees can now transfer their accrued end-of-service benefits when moving between approved employers within the same sector or across sectors (subject to MHRSD approval). The transfer is tax-neutral and preserves the employee’s tenure for benefit calculation purposes.
What is the new rule on summary dismissal?
The list of grounds for summary dismissal (without notice) has been expanded to include serious breaches of cybersecurity policy, data protection violations, and repeated non-compliance with Qiwa reporting. Employers must document the breach and provide evidence to MHRSD within three working days.
How should my business prepare for the 2026 updates?
Review and update all employment contracts to fixed-term models, register all existing employees on Qiwa, audit WPS compliance, assess your Nitaqat position, update HR policies on remote work and leave management, and train your payroll and HR teams on the new penalty framework.
How Bitrixme Can Help
Bitrixme provides comprehensive Saudi labour law compliance services, including contract audits, Qiwa registration support, Nitaqat strategy, WPS compliance reviews, and employee training. Our team of Saudi employment law specialists stays ahead of every regulatory change.
Contact Bitrixme today to ensure your business is fully compliant with Saudi labour law 2026 requirements.
