MHRSD and MoJ Recognize Wage Clause in Employment Contracts as Enforceable to Speed Up Labor Dispute Resolution

The Ministry of Human Resources and Social Development (“MHRSD”) in collaboration with the Ministry of Justice (“MoJ”) have made an official statement to make wage clauses within employment contracts serve as an enforcement instrument in the Kingdom of Saudi Arabia (“KSA”). The announcement was made on 14/04/1447H (corresponding to 06/10/2025G) with the initiative to enhance protection rights in the labor market and promote fairness and accountability in contractual relationships between employers and employees.

Wage clause protection and Enforcement in employment contracts:

• Legal Recognition of Wage Clauses in Employment Contracts

One of the most consequential regulatory advancements introduced by MHRSD is the elevation of wage provisions within employment contracts to instruments that can be directly used in enforcement proceedings. This development significantly enhances employees’ legal standing in disputes concerning non-payment of wages.

Under the new framework, employees are empowered to initiate enforcement proceedings without the need to provide supplementary documentation, as wage verification is seamlessly conducted through the integrated “Mudad” platform. This procedural efficiency not only expedites judicial processes but also reinforces transparency and accountability within the labor market.

By streamlining dispute resolution mechanisms and fortifying employee protections, this initiative contributes to a more stable and equitable working environment, aligning with broader objectives of labor reform and governance.

• Procedural Requirements for Utilizing Employment Contracts in Enforcement Proceedings

To enable the use of an employment contract as a direct instrument in enforcement proceedings under the recent regulatory framework, the following must be satisfied:

1. Register the employment contract through Qiwa
2. Obtain an enforcement number from MoJ.

In cases where employees do not receive their full wage within 30 days of the contractual due date, or receive only a partial payment after 90 days, they are entitled to submit an enforcement request via Najiz platform. Upon submission, the employer is granted a period of five days from the date of official notification to file an objection.

This mechanism enhances the enforceability of wage-related claims and reinforces the legal protections afforded to employees under Saudi Labor Law.

• Phased Implementation of the Framework for Direct Enforcement of Employment Contract Provisions

The MHRSD has announced that the framework enabling direct enforcement of employment contract provisions will be implemented in three gradual phases, allowing employers and employees sufficient time to adapt to the new legal requirements:

1. Phase One – Effective 6 October 2025, the framework will apply to all newly issued or updated employment contracts.
2. Phase Two – Beginning 6 March 2026, the enforceability provisions will extend to renewed fixed-term contracts.
3. Phase Three – Starting 6 August 2026, the framework will be applicable to open-ended employment contracts.

This phased approach is designed to facilitate a smooth transition for business entities and workforce participants, ensuring operational readiness and compliance with the updated regulatory standards.