Saudi Arabia continues its reform of the labour market and employment legislation, placing a priority on flexibility and protections for employees and employers. One of the more meaningful and recent changes is the 60-day grace period policy, which provides expatriate employees with a reasonable period of time to resolve their status after termination of employment contracts.

What is the ‘60-Day Grace Period’?

The Ministry of Human Resources and Social Development launched a 60-day grace period, available to expatriate workers in the Middle East with lapsed or cancelled contracts of employment in August 2025. Before this, expatriates were made subject to the immediate filing of an absconding report or change of status upon their employment contract’s expiration. This 60-day grace period has proven especially beneficial in areas of rapid industrial growth that have occurred in the Middle East, such as construction, tourism, and technology, specifically due to high levels of labour mobility.

Workers were able to leave and return home without a problem, transfer to a new employer, or renew their employment contracts with the employer they were with. The new grace period mitigates disruptions to key projects by allowing for smoother transitions and administrative ease. With Saudi Arabia’s Vision 2030 creating record levels of job opportunities and international hires, the legal buffer provides the market with more appeal to employers and skilled expatriates looking for more stability and flexibility.

How does it work?

In the times of the Grace Period:

• The Qiwa digital platform records that there is no active contract and begins the 60-day countdown.
• Employers are both not required and not allowed to immediately file an absconding or “absent from work” complaint.
• The worker has the freedom to change jobs with their employer, renew their contract, or leave Saudi Arabia at their own discretion.
• If no actions are taken after 60 days, Qiwa and all associated government systems will automatically label the worker as “absent” and impact their legal status.

Both employees and employers should recognise that the grace period allows for additional time, but it does not, by itself, extend an individual’s Iqama (residential permit). Workers who let their iqama lapse during this 60-day timeframe could lose their legal status and face penalties. It is central to monitor the validity of all documents and deadlines through the Qiwa and Muqeem systems to remain compliant with employee rights and employment prospects.

Why was this introduced?

Before this reform, expat workers could reach “absconding” status immediately after the termination of their contract, which resulted in stress and uncertainty for employees and human resources alike. A grace period provides more transparency, helps minimise disputes, and allows time and clarity for a worker to transition into regular employment or obtain a legal exit.

The Ministry clarified that this is to provide clarity when stating that workers are granted a 60-day grace period after the expiration of their employment contract and that the status change would be reflected on all government digital platforms once the grace period had expired.

Employment authorities anticipate that the policy’s grace period will serve as a pilot for future changes to expat welfare and labour market mobility. In fact, there is a growing conversation around expanding such grace periods to other types of visa holders, such as family visas and students, further enhancing Saudi Arabia’s legal landscape into an increasingly competitive space.

Both employers and employees should remain vigilant, as the implementation of numbered days for uncertain 50/50 hiring decisions will significantly influence the dynamic labour market in the Kingdom, particularly as new digital platforms and government initiatives emerge.

Impact on Saudi Arabia’s Workforce

Saudi Arabia’s total workforce has exceeded 18.2 million as of Q2 2025, with expatriates constituting over 70% of the private sector workforce. Every month, thousands of contracts renew or end, particularly during massive construction projects and other tech initiatives as part of Vision 2030. This reform provides an eagerly needed ‘safety net’ in the workforce ecosystem in the country.

More About Grace Period and Digital Compliance

• The Qiwa platform facilitates the management of the 60-day countdown.
• Employers are free from the hassle of continuous manual reports to the government.
• This rule applies only if the worker’s iqama is valid for the entire period.
• The initiative is a key building block in the country’s transition toward digital and transparent HR practices.

The advancement of digital contracts and employment management through Qiwa provides a new level of consistency and auditability for the Saudi Labour force. By consolidating employment status, statistics transfer, and document verification into one digital platform, employers and employees can experience enhanced communication, fewer human errors, and faster resolution of disputes or changes in status.

As legal compliance grows increasingly sophisticated, digital checks and human resource audits become a recommended practice to ensure all contractual actions are up to date. This is important for safeguarding organisations against the new penalties that are being introduced under the labour reform amendments in 2025.

What should employers and employees be doing?

Both parties must:

• Be proactive in tracking contract status and expiry dates via Qiwa
• Exercise the 60-day timeframe for transfers, renewals or legal terminations
• Consider the use of qualified HR and legal professionals to assist in special circumstances or disputes

It’s best to act before the grace period starts, as many won’t see the need until the end of the three months, when things get busy. Thus, employers need to train HR personnel on the new grace period procedures, update all onboarding and offboarding documentation, communicate timelines, and determine what actions employees should take. Employees should track notifications in Qiwa and the Muqeem system and take the first opportunity to start job searches or transfers of sponsorship, as appropriate.

Employees should never wait until the last days of the grace period, as this will already be a busy time. Taking action sooner rather than later will benefit employees. Being proactive will lessen the stress of the transition period, mitigate issues with ongoing compliance requirements, and maximise the continuity of staff and business operations.

How Can 6 Pence Help?

6 Pence delivers trusted HR, staffing, and workforce management services specialising in Saudi Arabia’s changing legal framework. We assist in:

• Helping expatriate employees and sponsors through all stages of contract transfers, renewals, or legal exits.
• Managing compliance and digital onboarding using Qiwa and other important government systems.
• Providing large employers and individuals with the latest updates on legal developments, such as grace period eligibility, notices, and transfers.

As an employer, an expatriate professional, or a workforce manager in Saudi Arabia, you trust 6 Pence for clearer advice, compliant solutions, and complete support.

Also Read: Guide to Job Contracts: Fixed and Non-Fixed in KSA