The Kingdom of Saudi Arabia (KSA) has made significant strides in digitizing its labor market, particularly through the introduction of electronic employment contracts. The Ministry of Human Resources and Social Development (MHRSD) has established digital platforms to streamline employer-employee interactions, primarily through Qiwa and Mudad. These platforms aim to enhance transparency, compliance, and efficiency in managing workforce-related matters.

Employment contracts are essential documents that outline the terms of employment between an employer and an employee. With the transition to digital contracts, the Saudi government seeks to standardize employment agreements, making them easily accessible and verifiable by both employers and employees. This shift represents a step towards a fully digitized labor market, minimizing disputes and ensuring that all employment agreements are properly documented and enforced.

Transition to Qiwa for Employment Contracts

Since April 2019, employers in Saudi Arabia have been required to generate electronically authenticated employment contracts. Initially, these contracts were created through Mudad, a platform linked to the General Organisation for Social Insurance (GOSI). Due to this connection, many referred to these contracts as “GOSI contracts.”

However, on May 12, 2022, the MHRSD mandated that all electronic employment contracts must be generated through the Qiwa platform. This change was introduced to enhance security, streamline labor market operations, and provide a centralized system for employment records. Employers and employees must now use Qiwa to manage their contracts, making it an essential tool for compliance with Saudi labor regulations.

What is Qiwa?

Qiwa is a comprehensive digital platform designed to facilitate employment processes in Saudi Arabia. It is an integrated system that allows employers to manage various aspects of employment, ensuring that their workforce complies with labor laws. The platform offers a range of services that benefit both businesses and employees, including:

• Employment contract authentication – Ensuring that contracts meet the legal requirements set by MHRSD.
• Issuance and renewal of work permits – Simplifying administrative processes for expatriate workers.
• Visa issuance, including temporary work visas – Streamlining the hiring of foreign workers.
• Occupation change and correction services – Allowing employers to update job roles and responsibilities.
• Employee visa transfer requests – Managing the movement of employees between different establishments.
• Saudisation certificate issuance – Helping businesses comply with national workforce policies.
• Approval of work regulations – Ensuring that company policies align with labor laws.
• Wage protection system certification – Verifying salary payments to employees.

Employers can access their company information, Nitaqat ratings (which measure compliance with Saudisation policies), workforce balance, and contract details through their Qiwa dashboard. This system provides businesses with real-time insights into their employment status, making compliance easier and reducing administrative burdens.

How Electronic Employment Contracts Work

When a company hires a new employee, it must generate an electronic contract through Qiwa. This contract consists of three main sections:

1. Compulsory Clauses

These are legally mandated clauses that cannot be altered or omitted. They include essential employment details such as:

• Employer and employee names
• Work location and business address
• Salary and benefits
• Working hours and job responsibilities

2. Optional Clauses

Employers have the flexibility to include a pre-set number of additional clauses, covering:

• Confidentiality agreements – Protecting business secrets and sensitive information.
• Restrictive covenants – Preventing employees from working for competitors after leaving the company.
• Compensation for wrongful termination – Setting predefined severance terms in case of contract violations.

3. Additional Clauses

A recently added feature allows employers to include custom clauses, giving them greater control over employment terms. Each clause can be up to 1000 characters long, allowing employers to tailor agreements according to specific business needs.

Once the contract is generated, it is sent to the employee for review. The employee has the option to accept or reject the contract:

• If the employee accepts, they must electronically sign the document, officially confirming their employment.
• If the employee rejects, the employer can make revisions and generate a new contract. There is no limit on the number of times a contract can be revised.

Once authenticated, the contract is automatically shared with relevant government authorities, including:

• The passport office (for expatriate workers)
• GOSI (for social insurance registration)
• Other regulatory bodies ensuring labor law compliance

The Role of Paper Contracts

Even though Saudi Arabia has transitioned to electronic employment contracts, many employers still use traditional paper contracts for various purposes, such as job offers and employment confirmations. These documents often contain detailed terms and conditions that may not be fully covered in Qiwa-generated contracts.

However, the MHRSD has clarified that Qiwa-generated contracts are the primary legal agreements governing employer-employee relationships. Despite this, Saudi Labor Courts continue to consider all supporting documentation in case of disputes, meaning that traditional contracts may still carry legal weight, especially when they clarify employment terms not explicitly covered in the Qiwa contract.

Benefits of Electronic Employment Contracts

The move to digital employment contracts offers numerous advantages for businesses and employees in Saudi Arabia, including:

• Increased transparency – Digital contracts are stored securely and can be accessed by all relevant authorities, reducing fraudulent employment practices.
• Legal compliance – Ensures that all employment agreements meet labor law standards.
• Convenience – Employers can generate, revise, and authenticate contracts quickly without paperwork.
• Improved dispute resolution – Since contracts are electronically stored, they provide clear evidence in case of legal disagreements.

Need Legal Assistance?

Navigating Saudi Arabia’s evolvihttps://baticfirm.com/ksa-transformative-labour-laws/ng labor laws can be complex. At Batic Law Firm, we specialize in helping businesses comply with employment regulations, draft effective contracts, and resolve labor disputes. Our team of legal experts provides guidance on all aspects of labor law, ensuring that your company stays compliant while protecting its workforce.

If you need expert assistance with Qiwa employment contracts or any other labor law matters, contact us today for a consultation.