Article 107 is one of the provisions of the Saudi Labor Law that regulates the relationship between the worker and the employer concerning overtime hours and work during official holidays. It ensures that workers are fairly compensated for this additional work. Workers have the right to choose between receiving payment or taking additional time off. In the following sections, we will explain how to calculate overtime pay.
Article 107 of the Saudi Labor Law is one of the fundamental pillars of this system. It governs the relationship between employers and employees concerning overtime hours, aiming to achieve a balance between workers’ rights and employers’ needs while ensuring appropriate compensation for additional work. This article specifies the rules and conditions to be followed by both parties, particularly in cases where one party wishes to terminate an indefinite employment contract.
In this article, provided by Al Othman Lawyers and Consultants, we will provide an overview of the Saudi Labor Law, highlight the provisions of Article 75, and offer a detailed explanation of its key clauses, scope, and practical application. if you need any help from a labor law attorney in Saudi Arabia do not hesitate to contact us
Contents
- 1 Overview of the Saudi Labor Law:
- 2 Text of Article 107 of the Saudi Labor Law:
- 3 Purpose of Article 107:
- 4 What Does Article 107 Cover?
- 5 How is Overtime Pay Calculated?
- 6 What Qualifies as Overtime Work?
- 7 Worker Rights and Employer Responsibilities Under Article 107
- 8 Significance of Article 107:
- 9 Overall Impact of Article 107:
- 10 Sources:
Overview of the Saudi Labor Law:
The Saudi Labor Law was issued on August 23, 1426 AH (September 27, 2005) and published on September 25, 1426 AH (October 28, 2005). It is one of the most significant legislative frameworks as it was designed to regulate the relationship between employers and workers, achieve balance between both parties, and clarify the rights and duties of each. This ensures the development of the labor market and promotes national economic growth.
The law covers several areas, including:
- Definitions and general provisions
- Employment regulations
- Employment of non-Saudis
- Training and qualification
- Employment relations
- Working conditions and terms
- Part-time work
- Workplace safety, prevention of major accidents, and occupational injury protection
- Social and health services
- Employment of women
- Employment of minors
- Maritime employment contracts
- Work in mines and quarries
- Labor inspections
- Labor dispute resolution bodies
- Penalties
- Final Provisions
Text of Article 107 of the Saudi Labor Law:
- The employer must pay the worker overtime compensation for additional working hours equivalent to the hourly wage plus 50% of their basic wage. The employer may, with the worker’s consent, compensate for overtime hours with paid compensatory leave instead of monetary payment. The regulations outline the relevant provisions for this arrangement.
- If the establishment operates based on a weekly standard for working hours, any hours worked beyond this standard are considered overtime hours.
- All hours worked on holidays and official days off are considered overtime hours.
Purpose of Article 107:
The primary aim of Article 107 is to establish clear regulations for determining appropriate compensation for overtime work. It also seeks to protect workers’ rights in cases where they work additional hours or during official holidays, ensuring employers do not exploit them. Furthermore, the article aims to organize the payment process for overtime hours fairly and structured.
you can also read: Article 111 of the Saudi Labor Law: Workers’ Rights, Compensation, and Calculation of Wages and Unused Leave.
What Does Article 107 Cover?
Explanation of the Article:
Article 107 focuses on overtime work beyond the original working hours specified for the worker by the employer, whether on a daily or weekly standard as stated in their contract. The article clarifies the mechanism for compensation in such cases to prevent employers from exploiting workers by having them work extra hours without proper compensation. It also addresses work during official holidays and days off. Workers, in agreement with their employer, may choose to take additional leave instead of receiving monetary compensation.
Key Provisions Covered:
- Compensation for overtime work.
- Work during holidays and official days off.
- Actual working hours.
How is Overtime Pay Calculated?
According to the Ministry of Human Resources and Social Development, overtime pay is calculated as follows:
Overtime Hourly Wage = Regular Hourly Wage × 1.5
This means the worker receives their regular hourly wage plus an additional 50%.
Example:
If a worker earns 25 SAR per regular working hour, their overtime hourly wage would be:
25 × 1.5 = 37.5 SAR per overtime hour.
What Qualifies as Overtime Work?
- Work Beyond Regular Daily Hours:
- If a worker continues to work after completing 8 hours daily (or 48 hours weekly), as stipulated by labor law from the Ministry of Human Resources and Social Development, this is considered overtime work.
- Work on Official Holidays or Public Holidays:
- Working during official holidays (e.g., National Day or religious holidays) is considered overtime work and must be compensated using the same formula (Regular Hourly Wage + 50%).
Overtime wages are paid according to Article 15 of the Work Regulation Bylaws.
For further reading: Conditions for Foreign Investment in Saudi Arabia: Comprehensive Guide, Fees, and Benefits.
Read Also: Article 70 of the Saudi Labor Law: Regulating Disciplinary Penalties and Protecting Worker Rights
Worker Rights and Employer Responsibilities Under Article 107
Worker Rights Under Article 107:
- Fair Compensation:
Workers are entitled to receive compensation as specified under Article 107. If this compensation is not provided, workers have the right to approach the Labor Office to claim their rights. They may also consult a labor lawyer specializing in legal advice and labor dispute resolution. - Recording Overtime Hours:
Workers are advised to document all overtime hours to ensure their rights are protected and to claim their due compensation at the end of the month along with their regular wages. - Work-Life Balance:
While overtime work may occasionally be necessary, the law emphasizes that it should not become burdensome or excessively exhausting for workers.
Employer Responsibilities Under Article 107:
- Ensuring Fair Compensation:
The employer is obligated to pay overtime wages in accordance with the rates specified in Article 107. - Organizing Work Hours:
Employers must structure work schedules to avoid assigning workers repeated and unnecessary overtime hours, ensuring efficient and balanced workflows. - Documenting Overtime Hours:
It is crucial for employers to record all overtime hours to maintain transparency and ensure accurate compensation.
Significance of Article 107:
The importance of Article 107 lies in ensuring that workers receive fair monetary compensation for their additional work beyond their regular working hours. This article fosters a work environment that respects labor laws and enhances understanding between workers and employers. Employers benefit from increased productivity through extended work hours, while workers are assured of receiving their rightful compensation for this extra effort. When workers know their rights are protected, they are more motivated to give their best at work.
Overall Impact of Article 107:
Article 107 serves as a legal tool that improves the workplace environment by safeguarding workers’ rights and encouraging them to work more efficiently. It also contributes to building positive labor relations between different parties.
Positive Impact on Labor Relations in Saudi Arabia:
By guaranteeing fair compensation, Article 107 boosts workers’ confidence in the Saudi labor system. This leads to enhanced productivity, stronger job loyalty, and overall development of the labor market in the Kingdom.
What is the Article 107 of the Labor Law?
Article 107 of the Saudi Labor Law regulates overtime work, ensuring workers are fairly compensated for additional hours. It mandates employers to pay 1.5 times the regular hourly wage for overtime or offer paid compensatory leave if agreed upon by the worker. The article also classifies work during official holidays as overtime and emphasizes documenting extra hours to maintain transparency and protect worker rights.
