Up to 94% cut in penalties for Labor Law violations

Okaz/Saudi Gazette

RIYADH — The Ministry of Human Resources and Social Development has made drastic reduction in the amount of penalties for the violations of the Labor Law and its Executive Regulations, reaching up to 94 percent, compared to the amounts of penalties that were previously endorsed in the schedule in 2021.

Minister of Human Resources and Social Development Eng. Ahmed Al-Rajhi issued a ministerial decision amending the table of violations and penalties. These included amendments to the value of fines for all types of violations on the basis of the classification of the category of establishments.

According to a review of the amendments made by Okaz/Saudi Gazette, the penalty for the late payment of wages and allowances of workers has been fixed at SR300 for each worker, regardless of the size of the establishment. Earlier, the value of penalty for the late payment of wage and allowances of each worker was about SR5000 for large establishments with 50 or more workers; SR3000 for establishments with workers ranging between 49 and 21, and SR 2000 for establishments with 20 or less workers.

The amendments showed that the violation for employing a working woman during the six weeks following delivery has been reduced to SR1000 from SR10000. There were also amendments to cut the fines for failure in having coverage of medical insurance for workers and their family members. The amended penalty is SR300 for establishments that have 20 workers or less, SR500 for establishments where the number of employees ranges between 21 and 49, and SR1000 for each worker in establishments with 50 or more employees.

The reduction in the penalties for violations of the Labor Law regulations also included slapping a fine of SR1000 on all establishments, regardless of their size for violation of employing Saudi workers in professions restricted to Saudi female workers. Before the amendment, the penalty for this violation was SR2500 for small establishments; SR5000 for medium establishments, and SR10000 for large establishments.

The amendment also made drastic cuts for violations related to registering a Saudi worker among the establishment’s workers without having a labor relationship through actually hiring him. The fine for this violation has been reduced to SR2000 from SR5000 for each worker in small establishments, while the fines reduced to SR4000 from SR10000 for medium establishments, and SR8000 instead of 20000 for major establishments.

The ministry introduced the amendments as part of its ongoing endeavor to review labor market regulations, support the stability and growth of establishments, safeguard rights of workers, and increase the attractiveness and flexibility of the labor market.

According to the new amendments, there are changes in the value of all violations on the basis of the category of firms based on the number of workers. Category A includes establishments with 50 workers or more; Category B includes the number of workers between 21 and 49, and Category C includes establishments, which have 20 or less workers.

Amendments were made in the values of these violations in a way that contributes to achieving compliance and supportive to establishments. These amendments aimed to improve the labor market environment by adapting financial fines to the sizes of establishments in the private sector.