Sweeping changes in Saudi labour law penalties: Ministry reduces violation fines by up to 80%

Dubai: The Saudi Ministry of Human Resources and Social Development has announced sweeping changes to the penalty structure associated with labour law violations.

Under the new changes, fines for some violations have been reduced by up to 60 per cent to 80 per cent b ased on establishment category. Categories are now determined by the total number of employees.

According to Saudi labor classifications, Category A includes entities with more than 50 employees, Category B is designated for those with 21 to 49 employees, and Category C is for establishments with 20 employees or fewer.

Key changes:

Hiring outside of Saudization quotas: Penalties for not adhering to Saudization quotas or employing non-Saudis in reserved roles have been revised: Category A at 8,000 riyals; Category B at 4,000 riyals and Category C at 2,000

Safety standards: Fines linked to non-compliance in protection, safety, and occupational health have been revised. Specifically, Category A establishments will face fines reduced from 10,000 to 5,000 riyals; Category B from 5,000 to 2,500 and Category C from 2,500 to 1,500.

Work environment protocols: Penalties associated with not establishing appropriate safety guidelines have been restructured. Category A fines moved from 5,000 to 1,000 riyals; Category B from 2,000 to 500 and Category C from 1,000 to 300.

Weather-related employment: Fines for employing workers under extreme weather conditions without necessary safety measures have been set at a flat 1,000 riyals across all categories.

Medical benefits: Establishments failing to provide medical insurance to employees and their families will face reduced fines: 1,000 riyals in Category A; 500 in Category B and 300 in Category C.

Child labour and maternity: There’s a significant penalty reduction for employing minors — down to 2,000 riyals for Category A. Employers hiring women within six weeks post-childbirth will be fined 1,000 riyals.

Role limitations for Saudi nationals: A 1,000-riyal penalty has been set for Category A establishments employing Saudis in roles reserved exclusively for them. Penalties are 5,000 and 2,500 riyals for Categories B and C, respectively.

Data integrity: Misrepresenting data to the ministry will result in a 3,000-riyal fine — a substantial reduction from 20,000 riyals.

Employment discrimination: Fines for discriminatory hiring practices have been curtailed: Category A at 3,000 riyals; Category B at 2,000 and Category C at 1,000.

Salary disbursement: A standardized penalty of 300 riyals will be levied on establishments not paying salaries in the official currency within the stipulated timeframe.