There are several key areas to be aware of within Saudi Arabia’s employment regulatory framework, specifically for companies that plan to initiate a full local office and human resources department. These challenges can be mitigated by use of a locally sourced payroll provider who is familiar with all of the local laws and rules for both local employees as well as foreign nationals.
Saudi Arabia requires that workers have employment contracts that meet local labor law standards. Companies must have a professional who can draft local employment contracts in Arabic and English.
|Time Off Work ?||
In the case of the death of a spouse or immediate biological family, workers are entitled 3 days paid leave. Female workers are entitled 15 days paid leave, according to Pinoy-Ofw.
|Severance / Redundancy Pay ?||
According to SAP’s Saudi Arabia page, Saudi labor law stipulates End of Service (EOS) payments are to be calculated based on the average wages (plus housing allowance) and service years an employee has worked, unless the employee was terminated due to gross misconduct.
If terminated by employer the severance is equal to the wages for a half-month for each year for the first five years of service, and a whole month for each subsequent year.
However, if the employee quits, the award is modified based on the following:
The employee may be entitled to the full award if they leave for reasons outside of their control (force majeure), or if it is a female worker who ends her contract within six months from the date of her marriage or three months from the date of giving birth.
|Termination of Employment ?||
For employees employed at a monthly rate, the employer must give thirty-days notice, or fifteen-days notice for other workmen. Alternatively, the employer can give payment in lieu of notice. Payment is generally based on the average wages of the last three months.
Compliance with local employment requirements is just one of the issues foreign companies face when employing staff in Saudi Arabia. For companies which intend to employ their staff directly through their incorporated Saudi Arabia entity, professional legal advice is recommended. Shield GEO provides an alternative path for companies to outsource the employment of their staff in Saudi Arabia.
As a Global Employer Organization (GEO), Shield GEO acts as the Employer of Record and ensures the employment is compliant with host country regulations regarding employment. In addition Shield GEO will handle payroll processing, tax and immigration. Using Shield GEO is the fastest and most cost effective way to deploy local and foreign workers into Saudi Arabia.
The Shield GEO solution is an attractive alternative where:
– the company is looking to employ staff quickly
– the company doesn’t have an appropriately incorporated entity in Saudi Arabia
– the company wants to work within a defined budget
– the company wants to limit its initial commitment in Saudi Arabia
– the company needs help with tax, employment, immigration and payroll compliance in Saudi Arabia
Shield GEO can contract directly with the company to employ and payroll their staff in Saudi Arabia. Shield GEO supplies local employment contracts for the staff which ensure that local statutory requirements are met covering issues such as termination, probation periods, leave entitlements and statutory benefits. Shield GEO is able to advise companies how to cover local employment regulations whilst still providing consistent global employment policies. Understand more about outsourced employment through Shield GEO
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