No Salary reduction without employee’s approval

The HRSD Ministry has clarified that as per Saudi Labor Law an employer cannot reduce a worker’s salary without his written approval. 

How to reduce worker’s salaries?

If an employer wants to reduce the salary of a worker, he will have to adopt the following procedure as per Saudi Labor Law.

1. Wait for the employment contract to complete.
2. Give a 2 months notice to terminate the contract.
3. Pay the End of Service Benefits calculated with the current salary.
4. Sign a new contract with the worker with the reduced salary.
5. Update the new salary in the GOSI records.

Salary Reduction v/s Salary Deduction

The salary reduction is different from the salary deduction.

• Salary reduction means reducing the salary of the employee on a permanent basis. 
• The salary deduction is one time or recurring deduction for a limited time. 
• 6 cases when salary deduction is allowed

How to report a violation?

The Ministry clarified that a worker can report salary reduction without written approval on the معاً للرصد application available on Playstore and Appstore.

Article 41 of Saudi Labor Law

In April 2021, the Saudi government introduced Article 41 of Saudi Labor Law according to which employers were allowed to reduce employee’s salaries for a period of 6 months without their approval.

However, in October 2021, article 41 has been repealed which means that employer cannot reduce workers’ salaries anymore.