Additional Details Released on Labor Reform Initiative for the Private Sector
March 23, 2021
At a Glance
- The Ministry of Human Resources and Social Development published additional details related to the implementation of the Labor Reform Initiative Program, which went into effect on March 14, 2021.
- The new details address process requirements for employment sponsorship transfers, Exit Re-Entry Visas and Final Exit Permits.
- The implementation of the Labor Reform initiative is expected to increase transparency in Saudi Arabia’s employment and immigration environments and allow for greater mobility of workers.
The situation
The Ministry of Human Resources and Social Development (MHRSD) published additional details related to the implementation of the Labor Reform Initiative Program, which went into effect on March 14, 2021.
A closer look
REFORM | NEW DETAILS | IMPACT |
Employment Sponsorship Transfer. Foreign nationals can change employers without their current sponsor’s consent if their employment contract has ended and if they have completed a minimum one year of service, starting from their date of entry to Saudi Arabia. If these conditions are not met, the individual can still change employers but must obtain approval from the current sponsor; details on exemptions from this requirement can be found here. |
Additional requirements. To benefit from the employment sponsorship transfer, employers must meet the prescribed Saudization and Wages Protection System requirements and must comply with the electronic contract registration and self-evaluation programs. Notice process. The sponsorship transfer process must be initiated by the new employer, who extends a job offer to the foreign national through the Qiwa portal. If the foreign national accepts the job offer, the current employer is notified and the prescribed notice period begins. The sponsorship notice process is complete after the notice period has ended. Employers can reduce the duration of the notice period if both parties agree. If the foreign national rejects the job offer, the transaction is automatically canceled. |
|
Exit Re-Entry Visa. Foreign nationals no longer need to obtain permission from their employer before traveling internationally. This does not apply to domestic household workers. |
Process. Foreign nationals can obtain Exit-Re-Entry Visas for themselves and their dependents through the Absher platform. To initiate the process, all applicants must be in Saudi Arabia, their residence permit must not be expired, their passport must be valid for at least 60 days, and there must be no traffic violations recorded under the applicant’s name. Once the request has been registered, the employer will receive a text message and will have 10 days to raise any objections toward the request with the MHRSD. However, the employer cannot revoke the request directly. Upon approval, the foreign national must complete the transaction within five days. A single-use Exit Re-Entry Visa valid for 30 days will then be issued. The visa is extendable only by the employer who can also request that the visa have a longer validity and be for multiple entries. |
Foreign employees can more easily travel internationally and for longer periods of time since they no longer need to undergo the cumbersome process of obtaining permission from their employer each time they seek to leave. However, foreign nationals should be aware that there are still some benefits to obtaining approval from their employers, such as being able to extend the visa, having it issued with a longer validity or being a multiple-entry visa. |
Final Exit Permit. Foreign nationals no longer need to obtain permission from their employer before their final exit from Saudi Arabia. This does not apply to domestic household workers. |
Process. The process for obtaining the Final Exit Permit is the same as for obtaining the Exit Re-Entry Visa listed above. Upon approval, the individual must complete the transaction within five days. A Final Exit Permit valid for 15 days will then be issued, which is shorter than the 60 days if the permit is issued on the employer’s request. |
Background
The new law is a continuation of other labor reforms that the Saudi government has implemented over the past year to increase oversight of employers and to protect workers’ rights, such as the Wages Protection System and self-evaluation compliance review program. Through these measures, the government seeks to increase transparency in the employment environment to attract foreign investment and foreign nationals. At the same time, the country is seeking to increase employment of its local population by increasing Saudization levels in specific industries.
Looking ahead
The reforms should increase Saudi Arabia’s competitiveness on the global market to attract highly-skilled talent by meeting international standards for labor protections. By fostering an attractive work environment for top talent, Saudi Arabia will be able to continue diversifying its economy away from a heavily oil and gas-reliant sector.
Since these reforms are new, it is expected that the actual processing of applications may be subject to additional changes. Fragomen will report on any developments.
This alert is for informational purposes only. If you have any questions, please contact the global immigration professional with whom you work at Fragomen or send an email to [email protected].