Saudi Law

20 Things Everyone Need to Know About New Labor Reform System

New labor reforms, New Kafala system, new contract system or Kafeel system are the same term used for only one term which will be issued on 14th March 2021. The old labor laws will be terminated.



Q. How much will be the Saudi Iqama Fees and Who will pay?

Ans: The Saudi Iqama fee is the same up till today and most expectedly there may be a reduction in the fee. The Saudi iqama fees will be paid by your company or Kafeel. The reduction is helping the company or the Kafeel to pay the Saudi iqama fees and so they can follow the law and order.

Q. How much will be the Fees for the Transfer of Employment?

Ans: Before the fees for the first (1st) transfer of employment was 2,000 riyals, 4,000 riyals for second (2nd) and 6,000 riyals for third (3rd) after that the amount of 6,000 riyals is fixed for every transfer of employment.

These fees are not being changed they will remain the same after the implementation of the new kafala system and furthermore, the fees for transfer of sponsorship/ Kafala will be borne by the employer/ Kafeel.



Q. Will there be any Change in duty Timings?

Ans: The Ministry of Labor made a proposal on their website which allows the companies and Kafeel to propose their recommendations about the change in duty timing which were 48 hours in a week in regular months and 6 hours a day in the month of Ramadan.

The Ministry wanted to reduce the weekly working hours by 8 hours making them 40 hours a week and reducing Ramadan timing by an hour and making it 5 hours shift. The same proposal is made for maternal leaves of a woman which are proposed to be increased from 10 weeks to 14 weeks. Keeping in mind that these are just proposals the final decision is still not made.

Q. What will be the Process for the Transfer of Employment?

Ans. The process for it will be same (Online) but earlier the new employer/ Kafeel had to send a request to the old employer/ Kafeel but now the employer/ Kafeel will send you the request directly. This can be done once your previous contract is finished.



Q. What will be the Procedure to Sign a Contract Under new Labor Reforms?

Ans. According to the new Kafeel system, there will be no on paper signature contracts. The contracts will be online through the online website, you will receive the contract from the employer/ Kafeel and after reading the contract, you will accept the request and your digital contract will be confirmed.

Q. When will be the Implementation of this System take place?

Ans. As we know most announcements done by the government are delayed because of several reasons including the reason of COVID-19 spread out in the country. Such as the host visa announcement was made but no action was taken.

Till today the Ministry of Labor is assuring the implementation of the new system/ labor reforms from 14th March, 2021. There can be a delay but we are positive about not getting any details about any type of delays.



Q. What will be the Process to Apply for Vacations?

Ans. You can apply for your vacations online. For an emergency leave, you can apply on the same day of need. But for planned vacations, you had to send an email to your employer or Kafeel informing them about your leave and requesting them to accept your proposed leave. In case of any rejections, your vacations can be delayed by 90 days. After that period the company or Kafeel have no right to stop you from going on vacations.

Q. Procedure to Apply for the Final Exit?

Ans. You can apply for final exit through your account yourself but only if the contract is over otherwise it can be a bit troublesome and we will discuss the after effects of the same later on in this article below.



Q. How to Resign from your Current Job?

Ans. The resign will be made online where you will inform the company/ Kafeel at least 90 days before the end of the contract, you will inform the company within  this 90 days that either you are leaving the company on final exit and returning back to your home country or transferring to other company after getting a job offer. However, In  case of emergency, you can resign or transfer your employment 30 days from the actual date of resigning .

Q. How to Avail the Emergency Leave?

Ans. According to the current labor law, the emergency leave is for only five (5) days. If anyone from your parents, sibling or children died then you can avail the emergency leave which will be of five (5) full paid days even if you are in the country or outside the country. No amendments are expected regarding this matter until today.



Q. Terms and conditions for the transfer of employment.

Ans. The terms and conditions for transfer are for the companies where you are being transferred and those are that you follow strictly the terms and conditions mentioned by Saudi Jawazat including the followings:

  • They must not be in the Red Zone.
  • Rather they are in green or platinum zones.
  • The company provides the salaries on time.

Q. Within how much time you must sign a New Contract Under New labor Reforms?

Ans. You cannot stay in the Kingdom of Saudi Arabia for more than 60 days without signing a contract



Q. What about the iqama or family tax Under New Labor Reforms?

Ans. A meeting of Ministries was called where the Ministry of Economy informed that tax returns this year is less than the income of previous years. The economists of the Gulf informed the government that the main reason behind that the economic loss is that many expats sent their families back to their homeland and now the revenue is being transacted out of the country. In light of this matter, we can expect a decrease in the iqama fee.

Q. When can One Terminate a Contract Under New labor reforms?

Ans. One can terminate a contract with his Kafeel’s consent as early as 2 months before the actual termination date. And it’s only allowed in a situation where the company is left with no more work to take from the employee.



Q. The New Labor Law/ Reforms will apply to whom (Exemption for which category)?

Ans. All those labors who work for a business firm, a company, housekeepers, housemaids, cooks, servants and all those who are related to housework will not follow the new law/ reforms.

Q. How many Types of Contracts are there and will they be Changed After the New Law/ Reforms?

Ans. There are two (2) types of contracts

  • Unlimited Contract
  • Limited Contract

A limit has been put upon the duration of the limited contract that they can not be of more than 10 years. The ongoing contracts will stay as it is till the end of the contract.



Q. What if the Kafeel would like to Apply for your Exit or Exit Re-entry?

Ans. The kafeel or your company won’t be able to apply for your exit or exit re-entry. This decision will be completely yours’s to decide whether you want to apply for the exit or exit re-entry or not.

Q. Which Companies Cannot Accept your Transfer Request?

Ans. All those companies won’t be able to accept your transfer requests which are not fulfilling the terms and conditions set by the Saudi Jawazat . Those companies will not be able to accept your transfer which is in a lower position than your current company in Nitaqat.



Q. In which Situation you can Transfer your Employment before the Completion of the Contract?

Ans. According to current labor law if your kafeel or company is in Red zone, your Saudi iqama is expired for more than 30 days or you came to Saudi Arabia and your new Saudi Iqama is not made or all the conditions mentioned before in the previous law has not been followed by the Company.

Q. Who will be the Custodian of Saudi Expats Passport?

Ans. The passport of the Saudi expat cannot be with the company and according to the law on each passport, there will be a fine of 5,000 Riyals if a company will be caught holding the Saudi expat’s passport.

In only one situation a kafeel or company can have the Saudi expat’s passport, if they sign a contract that the expat can lose his passport or cannot safely guard it then the company can have the passport without any fine.



Please note that all the above analysis is based on the unofficial information and the speculations of the new upcoming law/ labor reforms. We are hopeful that you must have loved the information provided above. Once the final regulations are being announced by the Ministry of Labor related to the new Kafala (Reform) system, we will definitely share it with you.

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