Saudi Arabia's labour ministry has issued updated employment regulations that take effect from the second quarter of 2026. The changes tighten rules on employment contracts, social security contributions, and termination procedures. Foreign employers who fail to align their local practices with the new requirements before the compliance deadline face financial penalties and restrictions on hiring expatriate staff.
The updated Saudi employment legislation introduces stricter standards for written employment contracts, mandatory registration with the General Organization for Social Insurance (GOSI), and revised dismissal notice periods for both Saudi and non-Saudi employees. All companies with workers registered under the Saudi employment system must comply by 30 June 2026. Foreign employers operating through locally licensed entities are subject to the same obligations as domestic companies.
This alert covers the key changes, identifies which business categories are affected, and sets out the immediate actions international companies should take before the deadline.
What the updated regulations change
Saudi Arabia's employment legislation has been amended across three principal areas.
Employment contracts. Every employment relationship must now be documented through a written employment contract registered on the Qiwa platform, the Ministry of Human Resources and Social Development's digital labour management system. Verbal agreements and unregistered contracts no longer satisfy the statutory standard. The contract must state the role, remuneration, duration where applicable, and working hours. Indefinite contracts remain permissible but require explicit designation.
Social security and GOSI registration. The updated rules extend GOSI registration obligations to a broader category of non-Saudi employees in designated sectors. Previously, social security contributions applied primarily to Saudi nationals. Under the revised employment legislation, certain expatriate categories working in Vision 2030 priority industries – including technology, tourism, and logistics – must now be enrolled in the applicable GOSI scheme. Employers bear responsibility for both the employee and employer contribution components.
Dismissal notice and termination procedure. The required dismissal notice period has been extended. For employees who have completed more than two years of service, the minimum notice period increases to 60 days. Termination procedure requirements now mandate that employers document the grounds for dismissal in writing before the notice is served. Summary dismissal without written grounds exposes employers to successful reinstatement claims before the Commission for the Settlement of Labour Disputes (Saudi Arabia's specialist labour tribunal system).
For a comparative view of how similar changes apply in the broader Gulf region, see our alert on updated employment regulations in the UAE.
Who is affected and what the threshold criteria are
The updated regulations apply to all employers holding a valid commercial registration in Saudi Arabia. This includes wholly foreign-owned entities, joint ventures with Saudi partners, and branch offices of international companies. The following categories face the most immediate exposure.
- Companies operating in Vision 2030 priority sectors with a mixed Saudi and expatriate workforce.
- Foreign employers whose Saudisation (Nitaqat) ratio places them in the medium or low compliance band.
- Businesses that currently rely on unregistered or paper-only employment contracts outside the Qiwa system.
- Employers who have not yet enrolled eligible expatriate staff in the extended GOSI scheme.
The threshold for mandatory GOSI enrolment of expatriates is determined by sector classification, not by headcount alone. An international company with as few as one eligible expatriate employee in a covered sector falls within scope. Companies in sectors outside the priority list retain their existing GOSI obligations for Saudi nationals only, but must still comply with the contract registration and termination procedure changes.
The compliance deadline is 30 June 2026. The Ministry of Human Resources and Social Development has indicated that inspections will begin immediately after that date. Non-compliant employers risk a block on new work permit issuance – a direct threat to headcount and growth plans in the Kingdom.
For broader questions about structuring your Saudi presence, our team advises on corporate law matters in Saudi Arabia across entity types and regulatory regimes.
To discuss how these changes affect your workforce in Saudi Arabia, contact us at info@ferrazwhitmore.com.
Immediate actions for international companies
International employers should treat the 30 June 2026 deadline as a hard operational constraint, not an administrative formality. The following steps are time-sensitive.
1. Audit all employment contracts. Review every contract against the updated statutory requirements. Identify agreements that are unregistered on Qiwa, that lack mandatory clauses, or that specify non-compliant notice periods. Prioritise employees with more than two years of service, where the new dismissal notice rules have the greatest practical impact.
2. Register contracts on the Qiwa platform. Any employment contract not yet registered must be uploaded and confirmed before the deadline. Where employees have not consented to digital registration, obtain written consent as part of a compliant contract amendment process.
3. Assess GOSI enrolment obligations for expatriate staff. Identify which expatriate employees fall within the extended GOSI scope by reference to sector classification. Calculate the additional social security contribution cost and update payroll systems accordingly. Retroactive enrolment may be required for eligible employees who should have been registered from an earlier date.
4. Update termination procedure documentation. Ensure that any pending disciplinary or performance management processes comply with the written-grounds requirement. Review template dismissal letters and internal HR procedures to incorporate the new documentation standard before any notice is served.
5. Check Nitaqat band status. The updated regulations interact with Saudi Arabia's Saudisation quota system. A failure to comply with contract or GOSI requirements can trigger a downgrade in Nitaqat band classification. That downgrade restricts the employer's ability to sponsor new expatriate visas – with consequences that extend well beyond the employment law context.
Engaging a lawyer in Saudi Arabia with cross-border employment experience is particularly important where an international company's home-country HR policies conflict with the updated local requirements. A law firm in Saudi Arabia familiar with both the Qiwa system and GOSI administration can identify gaps that internal teams may overlook.
Our employment law practice in Saudi Arabia supports international companies through contract audits, GOSI compliance assessments, and termination procedure reviews. For a preliminary review of your compliance position, email us at info@ferrazwhitmore.com.
About Ferraz & Whitmore
Ferraz & Whitmore is an international law firm based in Lisbon, advising business clients across 46 jurisdictions. Our employment law practice supports international companies managing workforce compliance, contract restructuring, and termination procedures in Saudi Arabia and across the Gulf region. The firm combines Portuguese civil law expertise with English common law tradition, enabling our team to bridge the gap between home-country HR standards and local statutory requirements. Our practitioners have advised on employment matters before Saudi labour tribunals and have direct experience with the Qiwa registration system and GOSI compliance processes. We work with multinationals, regional investors, and in-house legal teams who need results-oriented counsel across multiple legal systems. To discuss your Saudi Arabia employment compliance position, contact us at info@ferrazwhitmore.com.
Disclaimer: This publication is provided for informational purposes only and does not constitute legal advice. The information herein should not be relied upon as a substitute for professional legal counsel tailored to your specific circumstances. Ferraz & Whitmore assumes no liability for actions taken or not taken based on the contents of this material. For advice regarding your particular situation, please contact info@ferrazwhitmore.com.