Human Resources raises the percentage of documented employment contracts to 90%
In a strategic move aimed at regulating the Saudi labor market, the Ministry of Human Resources and Social Development announced new updates regarding compliance requirements for documenting employment contracts through the “Qiwa” platform. This announcement comes as part of the Ministry’s ongoing efforts to enhance the efficiency of the labor market and safeguard the rights of all contractual parties. The new updates aim to achieve unprecedented compliance rates within the next few years.
Digital transformation and the history of regulating the Saudi labor market
Given the overall context and historical background of business sector regulation in Saudi Arabia, the Ministry of Human Resources and Social Development has made significant strides in automating labor services. In the past, paper contracts were prevalent, sometimes leading to lost rights or delays in resolving labor disputes. With the launch of Saudi Vision 2030, the Kingdom embarked on a comprehensive digital transformation, resulting in the creation of pioneering platforms such as the “Qiwa” platform. Documenting employment contracts through these platforms has become a cornerstone of transparency, with establishments gradually being required to document contracts over the past few years to achieve a conflict-free work environment built on clear and digitally documented legal foundations.
Strategic dimensions and the importance of documenting employment contracts
The importance of this step extends beyond mere procedural considerations, encompassing far-reaching positive impacts at the local, regional, and international levels. Locally, increasing the documentation of employment contracts contributes to stabilizing labor relations, reducing the influx of cases to labor courts, and boosting employee productivity due to job security. Regionally and internationally, these measures enhance the attractiveness of the Saudi labor market to global talent and expertise, and underscore the Kingdom's commitment to the standards of the International Labour Organization. This commitment positively impacts the Kingdom's ranking in global competitiveness and human rights indices, making it a safe and reliable investment destination for foreign companies.
Mechanism for calculating compliance rates and time phases
The ministry explained in detail that the plan to increase compliance rates will be implemented in well-defined phases. The first phase will raise the target compliance rate to 85% starting April 30, 2026. This will be followed by the second phase, which aims to reach 90% by June 30, 2026. This percentage is calculated automatically and directly by comparing the number of documented contracts with the total number of employees registered with the establishment. This precise digital mechanism allows employers to monitor their establishments' performance with complete clarity through dashboards on the Qiwa platform, thus preventing any manipulation or human error in the evaluation.
Call for establishments to rectify the situation and avoid service suspension
In its commitment to ensuring the continuity of private sector operations, the Ministry of Human Resources and Social Development has urged all establishments to expedite the review of their employees' undocumented contracts. The Ministry emphasized the necessity of completing all documentation procedures through the Qiwa platform to guarantee compliance with the required percentages before the specified deadlines. Failure to comply with these directives could lead to significant difficulties, directly impacting the ability of non-compliant establishments to benefit from various government services linked to compliance indicators. Ultimately, this measure is a crucial step towards enhancing the quality of contractual relationships and ensuring a healthy and sustainable work environment for all.
