Minimum Wage
Minimum wage is all the salary that is given to the worker for his work by virtue of a written or oral employment contract regardless of the kind of wage or its method of payment, in addition to periodic increments.
Wages are fixed in individual agreements between the worker and the employer. Though, it is government's responsibility to fix the minimum wage rate and the legislation provides for the establishment of a minimum wage system by the government. Council of Ministers, upon a proposal by the Minister, sets a minimum wage whenever necessary.
If the employment contract or the work organization regulation do not provide for the wage binding on the employer, the wage estimated for the same type of work in the firm, if any, is adopted; otherwise, the wage is estimated in accordance with the profession's norms at the place where the work is performed. In the absence of such norms, the Commission for Settlement of Labor Disputes estimates the wage in accordance with the dictates of justice.
The following are exempted from the implementation of the provisions of this Law; the employer’s family members, namely, the spouse, the ascendants and descendants who constitute the only workers of the firm (family run enterprises); domestic helpers and the like; sea workers working on board of vessels with a load of less than five hundred tons; certain agricultural workers o; non-Saudi workers entering the Kingdom to perform a specific task for a period not exceeding two months; and the players and coaches of sports clubs and federations.
Source: §2, 89 & 95 of the Labour Law 2005, last amended in 2015
Regular Pay
Actual wage is the basic wage plus all other due increments decided for the worker for the effort he exerts at work or for risks he encounters in performing his work, or those decided for the worker for the work under the work contract or work organization regulations. Wage includes:
- The commission or percentage from sales or profits paid against what the worker markets, produces, collects or realizes from increased or enhanced production;
- Allowances the worker is entitled to for exerted effort, or risks he encounters while performing his job;
- Increments that may be granted in accordance with the standard of living or to meet family expenses;
- Grant or reward: What the employer grants to the worker and what is paid to him for honesty or efficiency and the like, if such grant or reward is stipulated in the work contract or the work organization regulation of the firm or if customarily granted to the extent that the workers consider it part of the wage rather than a donation;
- Other privileges include: what the employer commits himself to provide to the worker for his work by stating it in the work contract or the work organization regulation and it's estimated at a maximum of two months basic wage per annum, unless it is otherwise determined to exceed that in the work contract or the work organization regulation.
The worker’s wages and all other entitlements are paid in the Country’s official currency (Saudi Riyal) at the workplace during working hours. Wages may be paid through accredited banks in the Kingdom, with the consent of the worker, provided that their due dates do not exceed the specified dates.
Workers are entitled to their pay on a regular and timely basis. Wages are paid monthly to the workers employed on monthly basis; weekly to the workers employed on daily basis; and weekly commensurate with the completed portion of the work to the the piece rate workers (If the work is done by the piece and requires a period of more than two weeks for completion of work). In other cases, the worker’s wages shall be paid at least once a week. Wages are paid during working hours and at the workplace. There is also provisions for direct transfer to the employee bank account.
Employers are not allowed to deduct worker's salary, without his/her consent, for reasons other than those specified by the law. In the following cases, no such written consent is required:
a) Payment of loans extended by the employer;
b) Social security contribution or other provident fund contributions;
c) Fines for labour law violations
However, in all cases, deductions made may not exceed half the employee's due wage (50%), unless the Commission for the Settlement of Labor Disputes determines that further deductions can be made or that the employee is in need of more than half his wage. In the latter case, the employee may not be given more than three quarters (75%) of his wage.
In case of deduction or delay (without valid justification), the worker, his representative or the head of the competent Labour Office may submit a request to the Commission for the Settlement of Labour Disputes to order the employer to return to the worker any wrongfully-deducted amounts or to pay the outstanding wages. The said Commission may, if it establishes that the employer has unjustifiably deducted the said amounts or delayed the payment of the wages, impose on the employer a fine not exceeding twice the amount deducted from the worker's wage or twice the outstanding wages. Saudi Arabia is currently implementing a wage protection system where companies are required to deposit worker salaries in bank accounts.
Source: §2, 90-94 & 96-97 of the Labour Law 2005, last amended in 2015
