What Are the New Labor Laws for Expats in Saudi Arabia in 2026?

Introduction

Saudi Arabia continues to transform its labor market under Vision 2030, and 2026 brings significant updates to labor laws affecting expatriates. Whether you’re an employer or an expat employee, understanding what are the new labor laws for expats in Saudi Arabia in 2026 is crucial for compliance and success. This article provides a comprehensive overview of the key changes, from visa reforms to worker protections, helping you navigate the evolving legal landscape.

Overview of Saudi Arabia’s Labor Law Reforms in 2026

The Saudi government has introduced several amendments to the Labor Law and related regulations, aiming to improve the work environment, enhance worker rights, and support economic diversification. These changes are part of the broader Vision 2030 initiative, which seeks to reduce dependence on oil and create a more dynamic, inclusive economy. For expats, the new laws bring both opportunities and obligations.

Key Objectives of the 2026 Reforms

• Empowering expat workers with greater mobility and job flexibility.
• Strengthening contract enforcement and transparency.
• Enhancing wage protection and timely payment.
• Promoting Saudization while balancing expat contributions.

Major Changes in Expat Labor Laws for 2026

1. Visa and Residency Reforms

One of the most impactful changes is the expansion of the Premium Residency program and the introduction of new visa categories. Expats now have more options for long-term stay, including a five-year renewable residency that is not tied to an employer. This reduces the traditional sponsorship constraints.

2. Contract and Employment Terms

All employment contracts must now be in Arabic and English (or another language agreed upon). Fixed-term contracts cannot exceed five years, and probation periods are capped at 90 days. Employers must provide a written contract within 30 days of commencement.

3. Wage Protection System (WPS) Enhancements

The WPS has been strengthened to ensure salaries are paid on time and in full. Employers must register all employees and submit salary data through the system. Late payments incur penalties, and expats can file complaints easily via the Ministry of Human Resources and Social Development (MHRSD) app.

4. Working Hours and Overtime

Standard working hours remain 48 hours per week, but overtime rules have been clarified. Overtime pay is 150% of the regular hourly rate for extra hours, and 200% for work on Fridays, holidays, or during night shifts (10 p.m. to 6 a.m.).

5. Annual Leave and Public Holidays

Expats are entitled to 21 days of paid annual leave after one year of service, increasing to 30 days after five years. Additionally, Saudi Arabia has fixed public holidays: Eid al-Fitr (4 days), Eid al-Adha (4 days), and National Day (1 day).

6. End-of-Service Benefits (ESB)

The ESB calculation has been updated. For employees with less than five years of service, the benefit is half a month’s salary per year; for five or more years, it is one month’s salary per year. The calculation is based on the last basic salary. Employers must also deposit ESB contributions into a government-approved fund.

7. Termination and Notice Periods

Notice periods are now standardized: 30 days for employees paid monthly, and 15 days for others. Unfair dismissal claims can be filed within 30 days, and compensation may include up to three months’ salary. Expats on limited contracts can terminate without penalty if the employer breaches contract terms.

8. Saudization and Expat Quotas

Saudization requirements have been tightened in several sectors, including retail, healthcare, and engineering. Companies must meet specific percentages of Saudi employees to qualify for work visas. However, the government has introduced a ‘green list’ of professions exempt from Saudization, easing recruitment for specialized roles.

9. Health Insurance and Housing

Employers must provide comprehensive health insurance for expats and their dependents. Housing allowances are now mandatory and must be clearly stated in the contract. Alternatively, employers can provide accommodation directly.

10. Dispute Resolution and Labor Courts

Specialized labor courts have been established to handle disputes efficiently. Expats can file complaints without a lawyer, and proceedings are conducted in Arabic with translation services available. The goal is to resolve cases within 90 days.

How These Changes Affect Expats and Employers

For Expats

• Greater job mobility – New visa rules allow changing employers without sponsor approval.
• Improved protections – Stronger wage enforcement and clearer termination rules.
• Long-term stability – Premium residency and longer contracts offer security.

For Employers

• Compliance costs – Need to update contracts, register in WPS, and meet Saudization quotas.
• Higher standards – Must adhere to strict payment and leave policies.
• Legal risks – Non-compliance can lead to fines and visa bans.

Steps to Comply with the New Labor Laws

1. Review and update contracts to include all mandatory clauses (bilingual, housing, etc.).
2. Register all employees in the WPS and ensure timely salary payments.
3. Monitor Saudization ratios and plan recruitment accordingly.
4. Provide mandatory benefits – health insurance, annual leave, and end-of-service fund.
5. Train HR staff on new procedures for termination and dispute resolution.

Conclusion

The labor law reforms in 2026 represent a significant step forward for expat workers in Saudi Arabia. By understanding what are the new labor laws for expats in Saudi Arabia in 2026, both employees and employers can ensure a smooth transition and avoid legal pitfalls. These changes not only enhance worker rights but also contribute to a more transparent and efficient labor market. Stay informed, stay compliant, and leverage these reforms to build a successful career or business in the Kingdom.