What employment status means
Employment status (صفة العامل) describes the relationship between a person who performs work and the party for whom it is performed, in terms of whether the Saudi Labor Law (نظام العمل) applies to it: in full, in part, or not at all.
That question comes before every other question in human resources. The amount of the end of service award, the notice period, the ceiling on working hours and the right to raise a grievance all depend on it, and none of them can be examined until it is known whether the person concerned falls within the scope of the Law at all. Starting from one of those questions before the status is settled can lead to applying a correct rule to a person whom the text does not address.
The test for employment status in Article 5 of the Labor Law
Article 5 of the Labor Law applies its provisions to every employment contract under which a person undertakes to work for the benefit of an employer, under the employer’s direction or supervision, in return for a wage. The description has three elements, which are taken together: the work is done for the benefit of the other party, it is carried out under that party’s direction or supervision, and it is done for a wage.
The middle element is the one that decides. What counts is whether there is subordination (التبعية): who directs the work, who sets when and how it is done, and who holds the power to oversee it. The name written on the document does not count. Calling the contract a services agreement does not remove subordination where it exists, and calling it an employment contract does not create subordination where it is absent. The status is established from the facts of the relationship, and stopping at the title of the document gives what one of the parties chose to call it, not what the text provides.
Article 5 of the Labor Law sets out the elements but supplies no yardstick for measuring subordination in a particular case, and where a relationship is disputed, characterising it is a matter for the competent authority.
Article 5 of the Labor Law also brings within its scope the workers of the government and of public authorities and institutions, including those who work in pastures or agriculture, and the workers of charitable institutions. It brings in qualification and training contracts with people who are not employees of the employer as well, but with a limit stated in its wording: only within the special provisions that the Law sets out for them. That inclusion is limited rather than general, and it is the first place where the middle category described below appears.
Because the status follows from the facts, an agreement cannot change it. Article 8 of the Labor Law makes void any term that contradicts the Law, and any release or settlement of a right the Law gives the worker made while the contract is in force, unless it is more favourable to the worker. So a clause in which both parties declare that their relationship is not an employment relationship does not change its character where the elements of Article 5 of the Labor Law are present, because the status comes from the text and not from their agreement.
Three categories of employment status, not two
It is easy to picture the question as a binary one: inside the Law or outside it. The texts set out three categories, and the middle one is the one that can be overlooked:
| Category | Article | Who | What applies |
|---|---|---|---|
| Full application | Article 5 of the Labor Law | A person working under the employer’s direction or supervision for a wage | The provisions of the Law |
| Partial application | Articles 5, 6 and 49 of the Labor Law | Part time workers; casual, seasonal and temporary workers; trainees under a qualification and training contract | Closed lists set out in the text, a separate list for each group |
| Excluded from the Law | Article 7 of the Labor Law | Five listed categories | The provisions of the Law do not apply to them |
The category shows its effect in everyday questions, not in an abstract classification. A single question, such as how much annual leave an employee has accrued, takes a different path in each of the three categories. In the first, the answer comes directly from the provisions of the Law. For the second, it comes from that group’s list alone, and if leave is not among the heads it names, no answer comes from it. The third takes its answer not from the Labor Law at all, but from the instrument that governs the group. Giving the first answer to a person in the second or third category answers from a text that does not address them.
The middle category of employment status: closed lists that do not transfer
The middle category contains three lists, and each one is closed by its enumeration. The closure is the rule:
- Part time workers, under Article 5 of the Labor Law: the provisions that apply to them are those on occupational safety and health, work injuries, and whatever the Minister decides. That list is short, and anything beyond it does not apply to them by virtue of that Article.
- Casual, seasonal and temporary workers (العامل العرضي والموسمي والمؤقت), under Article 6 of the Labor Law: the provisions that apply to them are those on duties and disciplinary rules, the maximum working hours, daily rest periods and weekly rest, overtime, official holidays, safety rules and occupational health, work injuries and compensation for them, and whatever the Minister decides. The hours and rest provisions themselves are covered in our guide to working hours and the weekly rest.
- Trainees under a qualification and training contract (عقد التأهيل والتدريب), under Article 49 of the Labor Law: a third, different list, covering annual leave and official holidays, the maximum working hours, daily rest periods and weekly rest, occupational safety and health rules, work injuries and their conditions, and whatever the Minister decides. Items that are not on that list, such as the end of service award or the notice period, are not carried over to the training contract by Article 49 of the Labor Law.
How the Implementing Regulation adds to the middle category of employment status
The question does not end with the Law. Article 27 of the Implementing Regulation (اللائحة التنفيذية) deals with part time work and with flexible work (العمل المرن), and two of its rules change the picture that the Law alone gives.
The first is that part time workers are subject to the provisions of the Labor Law on leave, weekly rest, official holidays and overtime, under item 4 of paragraph One of Article 27 of the Implementing Regulation. Those are four heads beyond what Article 5 of the Labor Law lists for this group. Taking Article 5 of the Labor Law alone gives a narrower picture than the one in force, and taking the Implementing Regulation alone attributes to the Law something its text does not state. The sound approach is to attribute each rule to the instrument it comes from.
The second is that flexible work, meaning the contract arrangement the Implementing Regulation defines and not flexible working practices in general, is an arrangement in its own right, separate from part time work. It is work performed by a worker who is not full time, for one employer or more, with the wage calculated by the hour, on condition that the worker’s hours with any single employer are fewer than half the working hours of the establishment. That condition is part of the definition in item 1 of paragraph Two of Article 27 of the Implementing Regulation, not an extra description added to it. Dropping it extends the status beyond what the Implementing Regulation reaches: an hourly worker whose hours reach half those of the establishment, or more, is not in this arrangement. Under item 2 of paragraph Two of Article 27 of the Implementing Regulation, flexible work contracts are restricted to Saudis. So the appearance of the two arrangements in one Article does not make them a single status, and each has its conditions where it is set out.
The detail of both arrangements is found in the Implementing Regulation as currently in force. That instrument can be amended, so anything on which a decision rests is checked against its source, as at the date of that source.
The three lists overlap but do not coincide. In the Labor Law, the list in Article 6 carries overtime and the maximum working hours, while the part time list in Article 5 carries neither. Citing one list where another governs moves a rule from one group to another. The method is to name the group first, and then to consult that group’s list.
Employment status and the exclusions in Article 7 of the Labor Law
Article 7 of the Labor Law excludes five categories from its provisions:
- Members of the employer’s family, meaning the spouse, ascendants and descendants, who work in an establishment that employs no one else. That last condition is part of the text: an establishment with one worker from outside the family falls outside the exclusion.
- Players and coaches of sports clubs and federations.
- Domestic workers (العمالة المنزلية) and those in their position.
- Private farm workers and shepherds, and those in their position.
- Workers who are not Saudi nationals and who arrive to perform a specific task for a period not exceeding two months. The period is part of the description, so an engagement that runs beyond it falls outside the exclusion.
Article 7 of the Labor Law also provides for the Minister, in coordination with the competent authorities, to issue one or more regulations for four of the five categories, that is, for all of them except sports players and coaches. Those regulations set out the rights, duties and other special provisions for each category, and Article 7 of the Labor Law applies the penalties in Article 229 of the Labor Law to breaches of them. It follows that, for those four categories, exclusion from the Labor Law is not exclusion from all regulation: it is a referral to another instrument. The texts of those regulations were not among the sources we reviewed, so we state nothing about the hours, leave or wage deductions they provide for.
This list of five reflects Article 7 of the Labor Law as amended by Royal Decree M/44 of 8/2/1446H, in force from 19 February 2025. The earlier text listed a sixth category, sea workers on vessels of under five hundred tonnes, which that amendment removed, and the same amendment added the reference to the penalties in Article 229 of the Labor Law.
Two points remain open in the sources we reviewed. Article 7 of the Labor Law uses the phrase “and those in their position” (ومن في حكمهم) for domestic workers and for farm workers and shepherds, and we found nothing that defines how far it reaches. And any decisions the Minister issues under the three lists of the middle category, beyond the provisions of the Implementing Regulation described above, lie outside what we reviewed.
What employment status is distinguished from
The question employment status answers is whether the Law applies to a relationship, and how much of it applies. Neighbouring ideas sort themselves by the question each one answers:
- The type of contract. Whether a contract is for a fixed term or an indefinite term is a question inside the scope, examined once it is established that the Law applies. Employment status decides first whether that question arises at all. The two types are covered in our guide to fixed term and indefinite term contracts.
- Outsourcing (الإسناد). It settles who the employer is in the relationship, not whether the Law applies. An outsourced worker is the worker of some party, and asking which party that is differs from asking whether the status exists.
- Contract attestation. It is a procedure applied to an existing contract, and it neither creates the status nor removes it. A relationship in which the elements of Article 5 of the Labor Law are present is an employment relationship whether or not its contract has been attested. The procedure is covered in our guide to attesting employment contracts on Qiwa.
- The contingent workforce. That is a management description of ways of resourcing work, and it can group together people whose legal status differs. Employment status is not taken from a management label.
The provisions relied on are those of the Saudi Labor Law as published by the Ministry of Human Resources and Social Development: Article 5 (the scope of the Law and the part time list), Article 6 (casual, seasonal and temporary workers), Article 7 (the excluded categories and the regulations for them), Article 8 (the voidness of contrary terms and of releases made during the contract) and Article 49 (the list for the training contract); together with Article 27 of the Implementing Regulation (part time work and flexible work). Royal Decree M/44 of 1446H amended Article 7 of the Labor Law and did not amend Articles 5, 6, 8 or 49, and the last amendment to Article 5 of the Labor Law was made by Royal Decree M/46 of 1436H.
Settling employment status before the contract is drafted
The first question is not which template to use, but what the relationship is. If the work is carried out under the direction and supervision of the establishment for a wage, the status exists, and neither the title of the document, nor the way payment is made, nor what the person doing the work is called changes it. If the status is absent, the relationship is governed by its own sources, not by rules borrowed from the employment contract.
Status is also open to revision after the fact. An establishment can discover the character of a relationship at the first claim, after years of dealing on a different footing, and the entitlements are then assessed on what the relationship was, not on what it was called. Settling the status at the start can cost less than correcting it at the end.
This is an explanation of the concept and of the statutory provisions cited, not legal advice.
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