The Minister of Human Resources and Social Development has issued a Ministerial Decree approving the Schedule of Penalties against Violations by Companies and Establishments covering various aspects of operations falling under the relevant Labor Regulations.
The Schedule became operational from the date of its publication in the official gazette Ummul Qura under No: 4913 dated 13/05/1443 (17 December, 2021):
This note lists the important provisions under Schedule ‘A’. However, it does not cover all items. Schedule ‘B’ lists penalties for recruitment offices for violating the provisions of undertaking recruitment and manpower services.
| Penalties in Saudi Riyals | ||||
| No | Violation | Class A – Est. having 51 Employees or more | Class B – Est. having 1-50 employees | Class C – Est. having 10 Employees |
| 1. | Non-compliance with safety regulations related to the relevant practice area | 10,000.00 | 5,0000.00 | 2,500.00 |
| 2. | Non-provision of safety instructions to employees in at least two languages (Arabic and English) | 5,000.00 | 2,000.00 | 1,000.00 |
| 3. | Making employees work under the Sun during the prohibited time period without proper protective measures | 3,000.00 | 3,000.00 | 3,000.00 |
| 4. | Non-Provision of First Aid Box with proper medicine and other items in it | 3,000.00 | 2,000.00 | 1,000.00 |
| 5. | Non-provision of medical insurance to employees and their family members | 10,000.00 | 5,000.00 | 3,000.00 |
| 6. | Making a female employee work within six weeks of maternity | 10,000.00 | 10,0000.00 | 10,000.00 |
| 7. | Non-provision of electronic security systems at workplaces and warehouses (if any) | 10,000.00 | 5,000.00 | 2,500.00 |
| 8. | Not laying down conditions for wearing of attire (dress) at the workplace (in accordance with the type of practice) | 5,000.00 | 3,000.00 | 1,000.00 |
| 9. | Non-compliance with the required safety conditions for works involving risks and injuries | 20,000.0 | 10,000.00 | 5,000.00 |
| 10. | Employing Saudi men in jobs restricted for Saudi women | 10,000.00 | 5,0000.00 | 2,500.00 |
| 11. | Employing an expatriate without obtaining a work permit | 20,000.00 | 20,000.00 | 10,000.00 |
| 12. | Enabling an employee to work in a profession other than what is specified in the work permit or employment contract | 10,000.00 | 5,000.00 | 2,500.00 |
| 13. | Non-compliance with the requirement for arranging the employment contracts and employees’ files in the Arabic language | 3,000.00 | 2,000.00 | 1,000.00 |
| 14. | Provision of false information to the Ministry for obtaining benefits and services one is not entitled to | 20,000.00 | 15,000.00 | 10,000.00 |
| 15. | Non-compliance with the requirement for obtaining approval on Internal Work Rules Regulations and their announcement | 10,000.00 | 5,000.00 | 1,000.00 |
| 16. | Employing Non-Saudi nationals in jobs restricted to the Saudi nationals | 20,000.00 | 10,000.00 | 5,000.00 |
| 17. | Keeping passports or residence permits (Iqama) of employees or their family members | 5,000.00 | 5,000.00 | 5,000.00 |
| 18. | Not bearing the fee and levies for employees and making them pay such levies | 10,000.00 | 10,000.00 | 10,000.00 |
| 19. | Not undertaking a training program for at least 12% of Saudi employees (if the total employees exceed 50) | 5,000.00 | 2,500.00 | 1,000.00 |
| 20. | Non-compliance with the requirement of submitting employment contracts electronically on the relevant governmental portal | 10,000.00 | 5,000.00 | 5,000.00 |
| 21. | Non-compliance with the requirement to provide experience certificate and settle all dues of the employee within one week from the date of termination of contract or 15 days (if the contract is terminated by the employee) | 5,000.00 | 5,000.00 | 5,000.00 |
| 22. | Spending the amount accrued from penalties on employees without reverting to the Employees Welfare Committee within the organization or the Ministry (in case such a committee doesn’t exist) | 10,000.00 | 5,000.00 | 1,000.00 |
| 23. | Non-payment of salaries and other dues to the employees on specified dates | 5,000.00 | 3,000.00 | 3,000.00 |
| 24. | Non-compliance with the requirement to submit a monthly payroll protection statement | 15,000.00 | 10,000.00 | 5,000.00 |
| 25. | Not allowing weekly days off as stipulated in the law or the employment contract or making employees work more than what is stipulated in the law without overtime payment | 5,000.00 | 5,000.00 | 5,000.00 |
| 26. | Non-compliance with the requirement for allowing employees to avail leave | 5,000.00 | 5,000.00 | 5,000.00 |
| 27. | No formation of a committee to investigate misconduct or dishonesty within 5 days from receiving a complaint | 20,000.00 | 10,000.00 | 5,000.00 |
| 28. | Non-compliance to register employees on the relevant HR portal | 1,000.00 | 1,000.00 | 1,000.00 |
| 29. | Enabling a Non-Saudi employee to use websites and portals using the credentials of an authorized Saudi employee | 20,000 | ||
It is to be noted that the penalties will be applied for each violation individually. For instance, if a company fails to pay salaries to its employees on time, the listed penalty will be multiplied by the number of employees not receiving their salaries.
The Establishments could object to the Ministry’s decision within 60 days from the date of issuance of the decision. In case of non-payment of the imposed penalty within 60 days, the services being provided by the Ministry will be suspended for the company.
Al Ghazzawi & Partners