The Saudi Arabian labour market is going through a historic change in 2025. The MHRSD has brought about a series of reforms that aim at enhancing workers’ rights by making 67.1% of employers more accountable and updating the Kingdom’s employment laws and practices to be compatible with international labour standards.
During the second quarter of 2025, labour participation was at its peak with 67.1%, and unemployment was at its lowest point with 3.2%. These reforms are setting a new worldwide standard for the aspects of transparency, fairness, and digital governance, which are being addressed through services like Qiwa, which has more than 14.5 million users registered and 11 million contracts verified.
Saudi Labour Law Updates 2025
1. Introduction of Authenticated Digital Employment Contracts
A key development scheduled for 2025 is the Authenticated Employment Contract via Qiwa. These contracts are now enforceable as legal documents, and you will not have to rely on the long process of court authority. Contracts verified through Qiwa are enforceable under Saudi labour law and can enhance dispute resolution and overall transparency when hiring.
Implementation Schedule:
- Phase 1 (October 2025): new and existing contracts
- Phase 2 (March 2026): Fixed-term contracts
- Phase 3 (August 2026): all open-ended contracts
Additionally, any unregistered contract lacks legal enforcement, so it will be important for all Saudi employers to move towards digitally authenticated contracts.
2. Digitisation and Qiwa’s Role in Workforce Transformation
The Qiwa platform, an official workforce management system of MHRSD, changed labour management throughout the Kingdom. As of July 2025, Qiwa had more than 14.5 million users, 8 million employee portals and 1.4 million institution accounts, making it the bedrock of digital transformation for human resources in Saudi Arabia.
Qiwa now provides:
- Digital registration for all employment contracts
- Automated Saudisation calculations based upon Nitaqat updates
- Monitoring wage protection and compliance in real-time
- Workers are grouped into three skill levels: high-skill, skilled, and basic/labour.
This initiative has increased legal transparency and benefited the government’s Vision 2030 Digital Transformation Index, which achieved an overall maturity score of 86.7% in 2025.
3. Extended Employee Rights and Leave Policies
To encourage work-life balance and inclusion, the new labour regulations have increased leave entitlements for employees, as follows:
- Maternity Leave: It has been extended to 12 weeks (6 weeks after the delivery, which is mandatory).
- Paternity Leave: First of all, it is a 3-day paid leave, which has been newly added.
- Bereavement Leave: Three days of paid leave are granted to the employee in case of the death of an immediate family member(s).
The changes to these leaves help to promote gender equality and the well-being of working families. Thus, it can be considered a milestone of the Human Capability Development Program, which is one of the main pillars of Vision 2030.
4. 180-Day Probation Period and Structured Notice Rules
The new framework for onboarding employees includes a 180-day probation period, where both the employee and employer will have additional time to evaluate whether they are a good fit for the position. Any party can terminate the position within this timeframe, without notice or pay, facilitating flexibility and fairness in the early stages of employment.
Notice Period Adjustments:
- Employees: 30-day minimum for resignation from indefinite contracts
- Employers: 60 days for termination of employment
- Automatic Approval: If there is no response to the resignation request within 30 days, it will be automatically approved.
Structuring a notice period will assist in curbing abuse of power and help to keep offboarding consistent across sectors.
5. Workforce Localisation and Saudisation enhancements
The MHRSD has introduced changes to the Saudisation (Nitaqat) framework to enhance its incentives, building on its commitment to national workforce development that aligns with Vision 2023.
- Saudis with disabilities will now count as four employees when meeting quotas.
- Formerly incarcerated citizens will count as two employees for a period of two years.
- Students and part-time Saudi workers will now be counted as only 0.5 employees each for the purpose of Saudisation.
Furthermore, tourism-related businesses will now be required to employ at least one certified Saudi receptionist during their period of operation. As a result of these new frameworks, thousands of jobs have been created for Saudi citizens in various sectors, including hospitality, logistics, and administration.
6. Worker Protection and Wage Reform
The 2025 law enhances Wage Protection and occupational safety measures. Employers are subject to substantial penalties for delayed wage payments, false reporting of employees, or violating workplace safety measures.
Summary of Penalties:
- SAR 10,000-20,000: Employing workers for unauthorised third parties
- SAR 5,000: Occupational safety violations
- SAR 1,000 per worker: Violations of extreme weather regulations
Wage protection audits will take place every quarter using Qiwa’s Wage Protection System (WPS), which verifies records against GOSI and MHRSD data.
7. 60-Day Grace Period for Worker Transfers
Employers must now provide a 60-day grace period before determining that an employee is “absconding.” During this grace period, employees can:
- Move to a new employer
- Remain employed with the current employer
- Depart the Kingdom of Saudi Arabia lawfully
If the employee does not act within the grace period, they are automatically removed from the record and classified as “inactive” in government systems. The amendment enhances equity with regard to employee movement and corrects past abuses of the term “absconding.”
8. Work Hours, Overtime, and Rest Regulations
It is mandatory that every employment agreement henceforth shall specify the working hours as well as the regulations relating to overtime and rest.
- Normal working hours: 8 hours per day or 48 hours per week
- Rest is required after the employee has worked for 5 consecutive hours
- Daily rest period: a minimum of 12 hours between shifts
Employers who fail to comply could face fines relating to their employees’ wages or a temporary closure of their business. For employees of the Muslim faith, and during Ramadan, their working hours will be officially reduced as provided for by Saudi labour law.
Conclusion
The 2025 labour reforms in the Kingdom of Saudi Arabia represent a fundamental shift in workforce management. The reforms promote equality, flexibility, digital documentation, and fair employment, which apply to both the local and expat sectors. The new Saudi workplace is now shaped by the digital integration associated with Qiwa and tightened employment documentation through equally balanced employer-employee relationships.
Compliance with these reforms is also a strategic advantage for employers, supporting retention, reducing disputes, and ultimately supporting Saudi Arabia’s vision of establishing a thriving human capital economy that is competitive on a global stage.
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