The Ministry of Human Resources and Social Development in Saudi Arabia has released new guidelines for private sector workers' overtime pay, including how to account for time worked on special occasions, holidays, and in emergencies.
Why the New Overtime Rules?
Since some businesses do not pay the proper rate for overtime hours, this decision was made to ensure that workers receive their rightful compensation in accordance with labor regulations.
Overtime Calculation in Saudi Arabia
In Saudi Arabia, the standard workweek is capped at 48 hours (8 hours per day). If an employee exceeds these hours, they are entitled to overtime pay.
- Every extra hour worked is subject to a 50% financial increase. For example, if a worker earns 20 SAR per hour, they must be paid 30 SAR per overtime hour.
- For holidays and special occasions, overtime pay increases to 150% of the base wage. If a worker earns 20 SAR per hour, they should receive 50 SAR for each overtime hour.
Penalties for Non-Payment of Overtime
Overtime hours should not exceed 720 hours per year. Employees must provide written consent if they agree to work beyond this limit. Employers failing to pay overtime will face penalties such as:
- Fines for delayed or non-payment of wages.
- Suspension of business services by the Ministry.
- Restriction from hiring new employees.
- Mandatory records of employee overtime hours for audit purposes.
- Advance notice to employees about any overtime requirements.
Work Hours in the Private Sector
Every business must adhere to the 8-hour workday policy. Employers must obtain employee consent before requiring additional working hours.
How is Overtime Calculated?
The Ministry has clarified overtime calculations. If an employee earns 20 SAR per hour, their overtime rate is 50 SAR per hour.
