A simple mistake in workforce compliance can escalate into a significant financial and regulatory impact for both employers and employees.
For example, failing to verify the employee’s data at the onset of the hiring process results in fines up to SAR 27,000. Meanwhile, the inability to renew the employee’s Iqama, or work visa, puts them at risk of deportation.
Typically, workforce compliance refers to a set of rules and regulations that the organization and its employees must abide by to ensure the success of business expansion endeavors and proper risk mitigation.
Therefore, it is important to recognize the underlying risks these workforce compliance mistakes carry.
Final insights on staying compliant with onboarding and payroll, and more in this guide. Get your copy of “From Visas to Payroll: A 2025 Guide to HR Compliance in Saudi Arabia”.
Common Workforce Compliance Mistakes in Saudi Arabia
Below are examples of common mistakes that can occur, particularly due to the absence of a comprehensive approach to workforce compliance management.
Work Visas
Securing the right work visa for every new employee is an essential initial requirement for hiring foreign staff in Saudi Arabia.
Mistake: Applying for the wrong visa that doesn’t match the job description or the contract’s stated duration.
Consequence: This misalignment creates many complications in the hiring process. An employer sponsoring the wrong visa may lose the investments made in issuing a work visa, and the employee can face the risk of deportation and potential permanent bans from entering the Kingdom.
Iqama Renewal
Besides work visas, the employee must obtain an Iqama as soon as they get their work permits and complete health checkups in Saudi Arabia. Renewing both documents is essential to maintain the employee’s legal status to live and work in the Kingdom.
Mistake: Missed or late renewals
Consequence: A holder of an expired Iqama can’t work legally in Saudi Arabia. An expired Iqama can cause restrictions on the employee’s movement within the Kingdom and disrupt their ability to access essential services like healthcare. Typically, it is required to start the renewal process at least three days prior to expiry.
Related read: Keeping Up With Business License Renewal Requirements in Saudi Arabia (2025)
Mismanagement of Government Portals
Workforce compliance involves keeping employees’ records properly updated and reflected in the company’s government portals, such as Muqueem, Qiwa, and GOSI. These portals are intricately intertwined, meaning any disruption to the company’s activities in one portal can affect other areas of the business.
Mistake 1: Failure to remove terminated employees from the respective system
Consequence: Doing so makes the company liable to the penalties of having “ghost employees,” which may also be considered as occupational fraud.
Mistake 2: Not filing Zakat or VAT on time
Consequence: This non-compliance can block the company’s Muqeem, preventing it from processing exit and re-entry visas for foreign employees.
Mistake 3: Inability to process social insurance invoices through GOSI
Consequence: As a result, the company can’t bid on government projects or work with organizations in the Kingdom.
Mistake 4: Failing to meet Saudization (Nitaqat) quota
Consequence: The issue hinders a business’s ability to secure Saudization certificates, leading to significant challenges in processing Iqama renewals and visa issuance for foreign employees. These problems include rendering the company ineligible to bid on government projects.
Breaking the Myths: Why is Workforce Compliance Important?
Compliance has essentially evolved from a mere regulatory requirement to a critical factor for success in this rapidly evolving environment, acting as a unique selling point (USP) for foreign companies aiming to stay ahead of the competition and earn the trust of their customers and stakeholders.
For context, companies that don’t meet their required Saudization quota will automatically be disqualified from participating in governmental projects in Saudi Arabia. In contrast, compliant businesses are better placed to bid on governmental projects and gain access to financial support and incentives for training programs.
Below, we uncover common myths and misconceptions that can create inefficiencies in the company’s systems and policies.
Myth 1: Compliance is a series of reactive, last-minute fixes
Reality: Systems are highly interconnected in Saudi Arabia, so relying on last-minute fixes makes it easy for mistakes to slip through the cracks unnoticed or unaddressed, potentially leading to more fines and scrutiny, and operational lapses. Having a proactive approach in place prevents these errors before they occur or escalate into bigger problems, ultimately protecting brand reputation, saving time and resources, and supporting its long-term growth.
Myth 2: Compliance is a one-time task
Reality: Compliance is an ongoing process that requires constant oversight and due diligence. In fact, it should be embedded in the company’s culture and operations, right from the initial stages of incorporation all the way through post-business setup. Enhancing company-wide workforce compliance puts the power back in the hands of a business, enabling it to thrive, not only survive.
AstroLabs acts as your on-ground partner for everything related to workforce compliance, providing the necessary HR/GRO infrastructure that ensures a faster speed to resolution, access to the latest updates, close coordination across portals, and regular portal audits.
Our all-in-one workforce management solution encompasses payroll processing, employee registrations on governmental portals, talent acquisition, contract management, GOSI and Saudization certificate issuance, visa management, and offboarding.
So far, we’ve helped 700 foreign companies in Saudi Arabia stay on top of compliance matters across all the stages of their business formation process, from incorporation to corporate growth.
Frequently Asked Questions (FAQs) About Workforce Compliance in Saudi Arabia
1. What are the key compliance requirements under the 2025 Saudi Labor Law amendments?
In March 2025, Saudi Arabia introduced new amendments to Saudi labor laws, affecting various aspects of employment and the workplace. These changes include an extended probation Period and mandatory Training programs for Saudi employees.
Check out this article for a complete overview of the new changes and practical tips on how to adapt.
2. What are the new training and development requirements for Saudi employees?
Employers are now required to conduct comprehensive training and qualification policies for Saudi employees as part of ongoing compliance with Saudization requirements.
3. What are the probationary period rules under the new amendments?
The recent amendments have extended the maximum duration of probationary periods to 180 days. Specific leave types (Eid, sick leave) are no longer excluded by default from the calculation, allowing for greater flexibility in defining which types of leave to count during the probation period.
4. What are the consequences of non-compliance with Saudi workforce regulations?
As per the new amendments, the Ministry of Human Resources can withhold work permit renewals if Saudization quotas are not met. This update allows non-Saudi employees to transfer employers without consent.