Saudi Arabia overhauls domestic labour sector with key reforms

Saudi Arabia, home to the largest domestic labour sector in the Middle East with 3.74 million workers, is implementing significant reforms to enhance recruitment practices and safeguard workers' rights.

The Ministry of Human Resources and Social Development has introduced mandatory insurance for domestic labour contracts, a move designed to protect both workers and employers. This initiative is part of the ministry’s broader strategy, which includes a wage protection program, electronic contract documentation, labour culture awareness campaigns, and the unified contract program.

Key reforms for domestic workers

Launched in February 2024 through the Musaned platform, the insurance scheme is a cornerstone of these reforms. It ensures rights for both parties, such as guaranteed salaries and compensation for unforeseen circumstances.

For Workers:

• Compensation for permanent disability due to accidents.
• Financial protection in case of employer default.

For Employers:

• Reimbursement of recruitment expenses if a worker is unavailable, falls ill, or passes away, including repatriation costs.
• The insurance is mandatory for the first two years of employment and optional thereafter, providing a safety net that fosters trust and accountability in employment relationships.

A more secure and ethical labour market

These reforms, along with updates to labour regulations, aim to create a more secure and attractive recruitment environment. The ministry’s initiatives ensure respect for contractual obligations, set ceilings for recruitment from various countries, and align with international human rights standards.

Saudi Arabia has also intensified efforts to combat human trafficking, unauthorized visa sales, and financial exploitation, demonstrating its commitment to improving labour conditions and protecting human rights.

By enhancing the contractual relationship between workers and employers and fostering a supportive work environment, Saudi Arabia is setting new benchmarks for labour rights in the region.