(Dec. 4, 2020) On November 4, 2020, the Saudi Ministry of Human Resources and Social Development announced that it would launch new labor reform initiatives to attract skilled workers to the labor market in the kingdom and to improve the kindgom’s Kafala or foreign-worker sponsorship system. Those labor initiatives include (1) introducing digital documentation of work contracts between foreign workers and Saudi employers, (2) easing restrictions concerning the exit visa of foreign workers, and (3) abolishing the requirement that foreign workers receive their Saudi employer’s permission to switch jobs. The labor reforms will come into effect on March 14, 2021.
Reforming the Kafala System
One of the purposes of the new labor measures is to reform the kingdom’s Kafala system, a mechanism used by Gulf countries to monitor foreign workers through a work sponsor (the employer), who is responsible for foreign workers’ entry visas and legal residency. Under the system, workers cannot leave their employers or transfer to other jobs, despite abusive treatment, without their employer’s consent.
Digitalization of Work Contracts
Under the new labor initiatives, the Saudi Ministry of Human Resources and Social Development will institute digital labor contracts to “reduce the disparity” between Saudi employers and foreign workers regarding the existence or terms of a labor contract and to use in arbitrating any labor disputes that arise between them. The ministry will appoint an arbitrator and a case officer to assist employers and foreign workers in resolving such disputes.
Abolishing Requirement to Receive Employer’s Permission to Switch Jobs
The ministry also announced that the new labor reform initiatives allow foreign workers to move between Saudi employers when their work contracts expire without the consent of the first employer as long as they notify the employer three months before switching jobs.
Easing Restrictions on Foreign Workers’ Exit Visas
The new law labor initiatives ease previous restrictions imposed on the exit visas of foreign workers residing in the kingdom, allowing a worker to travel outside Saudi Arabia at any time without the Saudi employer’s approval after submitting a request to the Ministry of Interior (Homeland Security). The Ministry of Interior will notify the employer electronically of the worker’s upcoming departure. Additionally, after the expiration of the labor contract, the worker has the right to leave the kingdom without the consent of the employer. The Ministry of Interior will notify the employer on the final departure of the foreign worker.
Exception to the Labor Reform Initiatives
On November 5, 2020, the Ministry of Human Resources and Social Development announced that the new labor reform initiatives would not apply to private drivers, home guards, domestic workers, shepherds, and gardeners. The ministry has not provided an explanation as to why those five professions were excluded from the new labor reform initiatives.