Stock - Saudi riyal / Saudi economy
The penalty for delayed wage and allowance payments to workers is now set at SR300 for each worker irrespective of the establishment’s size. Illustrative image. Image Credit: Bloomberg file

Dubai: Saudi Arabia has announced a significant reduction in penalties for violations of the labour law and its executive regulations, cutting fines by up to 94 per cent from the levels set in 2021.

The revision, issued by the Minister of Human Resources and Social Development Minister Ahmad Al Rajhi adjusts the fines based on the size and category of establishments.

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According to Okaz, the penalty for delayed wage and allowance payments to workers is now set at SR300 for each worker, irrespective of the establishment’s size.

Previously, penalties for late payments varied from SR2,000 to SR5,000, depending on the size of the establishment, with larger ones facing higher fines.

The amendments also saw a reduction in fines for employing women during the six weeks post-delivery, now set at SR1,000, down from SR10,000.

Medical insurance coverage

Fines for failing to provide medical insurance coverage to workers and their families have also been modified.

For smaller establishments with 20 or fewer workers, the fine is SR3,00, increasing to SR500 and SR1,000 for medium and larger establishments, respectively.

In addition, the revised fines include a SR1,000 penalty, regardless of establishment size, for employing Saudi workers in professions reserved exclusively for Saudi female workers.

Before the amendment, these fines ranged from SR2,500 to SR10,000 based on the establishment’s size.

The amendments also drastically reduced fines for falsely registering a Saudi worker without actual employment.

Penalties now range from SR2,000 to SR8,000, depending on the size of the establishment, significantly lower than the previous range of SR5,000 to SR20,000.

These amendments, part of the ministry’s ongoing efforts to review labour market regulations, aim to support the stability and growth of establishments, protect workers’ rights, and enhance the labor market’s attractiveness and flexibility.

The new fine structure takes into account the varying sizes of private sector establishments, categorized into three groups based on the number of workers, to ensure compliance and support for businesses.