New reforms highly beneficial for Saudi Labor Market

The Ministry of Human Resources and Social Development emphasized that the newly launched Labor Reform Initiative (LRI) would be instrumental in regulating the local employment market and improve its competency, transparency and competiveness.

The initiative will come into force on March 14, 2021, and aims to support the Ministry’s vision of establishing an attractive job market, empowering and developing labor competencies and developing the overall work environment in the Kingdom.

One of the main objectives of the initiative is to further improve the contractual relationship between employees and employers and put an end to many undesirable tendencies prevailing in the local market.

The ministry sources noted that the number of unregulated workers in the local employment market ranges between 3.5 million and 4.4 million while the number of workers whose salaries have been delayed reached 1221,326.

The ministry said that the LRI is one of the initiatives of the Kingdom’s Vision 2030, that aims to improve the contractual relationship between the worker and the employer on the basis of the provisions of the labor contract.

Moreover, in the labor market, it will ensure the rights of the parties to the contractual relationship, improving the Kingdom’s classification in international competitiveness indices, and reducing recruitment costs significantly.

It is expected that the reforms would contribute to increasing the productivity of expatriate workers, raising the competitiveness of the labor market, retaining and attracting competencies to the labor market, and raising the competitiveness of the Saudi worker while comparing to the expatriate worker.

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