Saudi Arabias Ministry announced rules concerning recruitment and labor service companies

The Saudi Ministry of Human Resources has issued several proposed regulations pertaining to labor service providers and hiring practices. The public has been asked to provide input on the proposed framework by the ministry.

As per the proposed regulations, the ministry requires large human resources firms to have a paid-up capital of SR100 million and offer a bank guarantee of SR10 million. As a result, they are able to obtain a 10-year license.

Medium-sized businesses must have SR50 million in paid-up capital and SR5 million in bank guarantees in order to be granted a five-year license.

Small employment agencies are required to hold SR5 million in paid-up capital and have an SR2 million bank guarantee.

It is important to note that hiring managers have two years to switch to one of these groups.

The rules also provide the ministry the authority to require insurance coverage for risks brought on by labor, technical, or professional errors. This coverage needs to fit the size, operations, and nature of the business.

Also, companies that have less than six months left on their insurance period may not be able to continue operating.

Additionally, according to the legislation, the ministry may request a rise in the bank guarantee depending on a number of conditions, including:

- An increase in visa requests

- Rising complaints

- Market fluctuations

- Contract fulfilment

- Delays in recruitment 

The rules require businesses to post all service costs on a website that has been approved by the government. Additionally, they have to reveal the costs of hiring new staff members and the names of those who are permitted to communicate with Saudi embassies overseas.

It was emphasized in the regulations that licensees must hire staff who are fluent in the languages of the hired workforce.