Saudi Gazette report

RIYADH — The Ministry of Human Resources and Social Development has formulated new rules for practicing the recruitment activity and providing labor services. According to the new rules, a large human resources company is required to submit a bank guarantee worth SR0 million and a paid-up capital amounting to SR100 million to obtain a license for a period of 10 years.

The conditions included that medium-sized recruitment companies must have a bank guarantee of SR5 million and a paid-up capital of SR50 million to obtain a 5-year license, and the same license period for recruitment companies that have a bank guarantee of SR2 million and a paid-up capital of SR10 million. The small recruitment companies that have a bank guarantee of SR2 million and a paid-up capital of SR5 million will have the 5-year license period.

The ministry also stipulated that the licensed company must be a joint-stock company with capital fully owned by Saudi individuals. A license is also granted to a foreign investor who meets the requirements for foreign investment in these rules, and meets the minimum paid-up capital and bank guarantee, taking into account of the provisions of the Companies Law.

The ministry also seeks that companies have to provide insurance coverage for all risks of technical, labor and professional failures, in accordance with the nature, size and multiplicity of their business aspects, and they are not allowed to practice the activity if the remaining insurance period is less than 6 months. It is also permissible to request an increase in the bank guarantee in accordance with the controls that are determined when practicing the activity, based on a number of cases, most notably a request to increase the number of visas, changes in market conditions, an increase in complaints and delays in recruitment or contracts.

It stressed that the licensee must commit to documenting the required data and information, including the data of all his employees in the ministry's system and related systems, all contracts and dealings with customers in the approved electronic systems, and the licensee's data, including the workplace where he practices the activity.

The documentation obligations also included updating data when necessary, publishing all prices of activities licensed to be practiced on the website approved by the ministry, in addition to data of employees approved to deal with the Kingdom’s embassies abroad, the approved bank account for the licensee’s revenues, contracts of association with sending offices, and recruitment costs according to the type and gender of the recruited labor.

The ministry noted that the service provision procedures include submitting an application for recruitment visas on the approved platform in accordance with the controls set by the agency, and selecting male and female workers, taking into account the availability of professional or scientific specializations, or practical experience compatible with the professions for which they have been recruited.

The procedures also included concluding an employment contract with the worker and documenting it through the approved platform, provided that the worker is fully aware of the nature of his work, and that the contract includes the rights and obligations of both parties. Pursuant to this contract, a direct contractual relationship is established between the licensee and the worker, so that the licensee is responsible for paying all the worker's rights arising from that relationship, in accordance with the instructions issued by the ministry, while adhering to the provisions of the Labor Law and its executive regulations in this regard.

The ministry pointed out that the licensee may not, under any circumstances, employ labor service workers of a certain category, or a certain profession to work for another category, or another profession, except with the approval of the ministry. The workers, who provide their services to the client of the licensee from the establishments, are included in the workers on the basis of which the localization rates are calculated, unless the ministry sets specific conditions for calculating those workers in the localization rates.

It stressed the necessity for the licensee to provide employees who are proficient in the language of communication with the workers affiliated with him, and he may seek the assistance of external parties for this matter. The licensees must also adhere to the localization requirements of their clients when providing services, and refrain from providing their services by providing workers to the client whenever it violates the localization rate that must be provided to him, and not provide labor services to establishments specialized in activities prohibited by the ministry.

The ministry has presented the draft rules for a survey during the period from January 9 to February 9, 2025, with the aim of facilitating the process of employing support workers and professional workers to work for citizens, while ensuring that the latest implementation mechanism in the market is followed. This comes through understanding current legislation and identifying gaps in it, by submitting status reports, selecting best practices, updating regulations, and creating procedural guides, contracts, and supporting tools to facilitate the implementation of legislation for human resources and recruitment establishments