Sample Review of Saudi and U.S. Labor Law

A Comparative Study of the Wage, Working Conditions, and the Employer-Employee Relation in U.S. and Saudi Arabia

The Labor Laws refer to administrative policies imposed to govern certain minimum standards on the labor-related matters includes but not limited to employees’ safety, working hours, contractual matters, probation issues, vacations and terminations of the agreements. The labor laws are essential determinants of stability on matters of the employment, incorporating measures that prevents exploitations of the parties involved (employee and employer). Both the employee and the employer must remain loyal to the contractual agreement, without either side acting in the contrary. An alteration and improvement of the labor laws is achieved by an administrative process.

Research Problem

The changes in the labor laws have regulated the working environments, ensuring that employers do not exploit the employees. On the other hand, the labor laws prevent the employer from incurring unnecessary costs in meeting the contractual needs for employees who depicts disloyalty and dishonor. The Saudi Arabia privatization and modernization in the business and industries have gained momentum, something attributed to the Labor laws. Similarly, U.S. has turned as the first working option for potential workers across the world. This study reviews the commonalities and differences between the U.S. and the Saudi Arabia Labor Law. It also compares the wage, working conditions, and the employer-employee relation in U.S. and Saudi Arabia.

Research Methodology

The research framework was designed to address the validity between the U.S. labor laws and the Saudi Arabia labor law. With the decentralization of the communication technologies, more research on this issue was gathered from internet by differentiating the genuine and biased online sources whose information could be counted on developing this research. A critical instrument employed to distinguish the credible from incredible sources is the publishers’ image, identity through ISO, and the date of publication. Journals, for instance, held that the American labor laws are amended to sustain economic development and create a balance between the upper class and the lowers class people. In fact, the authors indicated that alteration of the U.S. labor laws are made when the nationals echo their concerns. Conversely, some authors suggested that the Saudi Arabia labor laws are designed to seek protection for the homegrown servants, providing wide opportunities and favorable wages than the foreign workers.

A comparative study of the wage, working conditions, and the employer-employee relation was conducted through online research work focusing on verified websites and internet sources. Some of the websites chosen belonged to the government of the respective countries. Google scholar was also used because of its deep and extensive library materials containing limitless networking of resources. Credential internet sources used in this research were written by professionals who were well qualified in the field of labor laws and relations.

Another approach that was fundamental for this research is the lexus nexus. This online library was chosen because of its precise and authoritative results necessary for critical research needs. The site is relatively easy to use and tailored to meet all aspects of research needs.  Here, the research team covered a wide range of information gathered from the senior and junior lawyers from the private and national parastatals. The fundamental idea about the nexus was that the U.S. labor laws are exercised on both the private and national organizations. This translates to fairly equal rights of securing a job in any of the sectors, without discriminations the non-Americans. Again, the instrumentality of the nexus was indicated through the investments by the private and public firms, thus cementing the significance of the U.S. labor laws towards national building.

Literature Review

This chapter creates insight on the Labor Law of both Saudi Arabia and U.S the labor, indicating how the statutes adjudicate for the employment rights in both countries.

The Saudi Labor Law

This regulation focuses on the social policies and the protection of the protection of foreign workmen and discouraging labor unions.

According to the Public Affairs Information Service (2000), “The labor laws are based on rapid modernization and industrialization of the Saudi Arabia.” Again, Brown (2010) articulates that the treatment of the labor affairs differs considerably from the norms that obtain in Western jurisdictions.

Chapter Two, Article (5) underlines the needs for maintaining a harmonious working relation between the employee and the employer. The training contracts with workers operate under the limits of special regulations given that the organization complies with the national statute.

Article (7) constitutes the rights of the employees in the case of faulty remuneration of the worker by the employer. The policy also prevents the exploitation of the domestic helpers from the risks and uncertainties that constitute in the production firms. Conversely, the employees are responsible for fulfillment of obligations that arise from the work contracts. The recognition of the contractual term is fundamental since it prevents the rights of employee and employer from been denied in the court of law (Morrison & United States, 2001).

The U.S. Labor Law

The U.S. Labor law has introduces various regulations that support the human wellbeing at the work place. For instance, the Occupational Health and Safety Act (OSHA) compels employers to timely review the safety information and report critical issues to the nearest administrative offices.

Moreover, it mandates employers to embrace friendly environments where employees are not exposed to direct hazards. The Occupational Safety and Health Review Commission (OSHRC) is charged with evaluating determinations that OSHA has been violated, also requires supportive evidence substantial steps to minimize the vulnerability of the employees to work hazards.

The Private sector innovations and experimentations have played a critical part in making the U.S. labor law special. For instance, many facets of the collective bargaining process, now part of the U.S. Labor Law, were initially privately developed by the parties. Thus, the Railway Labor Act represented an approach to regulating labor-management relations that evolved out of the bargaining experiences of the World War. With regard to this development, the nature and stature of arbitration as a process for resolving disputes concerning the interpretation and application of common agreements has lead to mature characteristics of the U.S. Labor Law.

The main chapters in the U.S. Labor Law are Chapter 2, Chapter 5, and Chapter 7. Chapter 2 reviews that women welfare in the employment. It advocates for equal employments rights for women as with the men. Still, it prevents women physical, psychological and sexual harassments in their course of duties. Creating awareness of the rights of women ensures that the employers treat them with dignity and respect.

Chapter 5 of the U.S. Labor Law campaigns for efficient means of solving labor disputes, bringing justice to the employee and the employer. This chapter whenever one party is offended, they are rewarded favorably. Chapter 7 promotes sufficient means of managing labor relations. For instance, contracts and probations are covered under this chapter. The clause ensures that regulations governing the utilization of the workforce are not overlooked but maintained in the working environments.

Differences between the Saudi Labor Law and the USA Labor Law


Every labour regulation ensures the compliance with the law and setting disputes between employers and employees.

There is a one-year statute of limitations, or prescriptive period, which applies to disputes between employers and employees. Due to legal jurisprudence in Saudi Arabia, this aspect is fundamentally critical. The Commission will investigate the complaint, take or development evidence as necessary, and make an award. Violating the regulations enforce additional penalties (Brennan, 2014).

In the United States, the NLRB has exclusive statutory jurisdiction of disputes over the right of workers under the National Labor Relations Act to be represented by a union, as well as of enumerated unfair labor practices by employers or unions. This jurisdiction concerns employers’ activities that may “affect commerce” and to the exceptions of the employees wellbeing.

In Saudi Arabia, the jurisdiction of the labor courts or similar bodies encompasses, either explicitly or implicitly, both disputes over rights and conflicts over interests. Similar variations are found in the jurisdiction of individual and collective disputes. In U.S., the law distinguishes between individual and collective disputes, but also recognizes a third category of so-called plural disputes, in which several individual workers are affected at the same time but not as representatives of the whole group. Such plural disputes, which involve conflicts of rights, are treated as individual differences. Apparently, most common conflicts involve interests, rather than rights, and are subject to entirely different procedures from those applicable to disputes over rights. The labor courts of U.S. have jurisdiction of only individual disputes, but it appears that what in Saudi Arabia are called plural disputes over rights also come within their jurisdiction (Brown, 2010).

In the U.S., the labor courts have jurisdiction, with minor exceptions, of every controversy between employers and employee that arises, directly or indirectly, out of the labor relations. The jurisdiction of the provincial labor courts extends to individual disputes resulting from legal standards or regulations, collective agreements, plant agreements, individual contracts of employment, industrial accidents, and occupational injuries, as well as those involving dues, contributions, or fines required by law (Chaudhry, 2008). In Saudi Arabia, labor courts are competent to decide disputes over the interpretation and application of collective agreements or collective labor agreements. These instruments create labor conditions applicable to individual labor relations and must include certain normative provisions imposed by statute. The labour courts play substantial role in solving arguments and misunderstanding on the contractual matters. The ordinary state courts elucidate claims based on industrial accidents.

The Employment Law

This law ensures that there are sufficient jobs for the country’s growing population, including the increase of the foreign workers.

This policy is known as “Saudization.” The idea worked to encourage the Saudis into joining the private sector. It was enacted as a result of complaints from Saudi nationals as a significant expatriate population supported the industry. The labor laws provide that employment is a right of the Saudi national, and it can be exercised to other after the Regulations have been fulfilled. In fact, Saudi Labor Law is made unique and special by these attributes.

The Labor Law is drafted in favor of the employees, ensuring that what is implemented cannot be waived. Some of the issues covered under this bill are the regulation of the employment to non-Saudis, building talent and knowledge development through training, ensuring qualification of the employee in different capacities, prevention of the industrial accidents and hazards, and the employment of women and minors.

Chapter Two of the U.S. Labor Law offers protection against critical industrial accidents. Article (128) states that firms that emit the hazardous substances that exceed human tolerance will be listed as risky firms. This policy prevents exposure of the employees to the health issues. The U.S. Labour law protects the employees from the exploitation, provides solutions to employments disputes, and bids both the employees and employers to the regulations that are founded on justice. The law is based on the necessity of executing justices to both employee and employers, ensuring that any employment matters arising between the two may be resolved with full justice. Chapter Three covers the work injuries that could occur to the workers. Article (133) indicates that the employer is held accountable whenever the worker suffers from accidents or the domestic reasons.

Discriminations on Religious Grounds

This area discusses how the labor laws prohibits the discrimination of workers based on their religious believes.

It is unlawful for the employer to admitting worker for a given term of service or enquiry about the political, religious, or trade union opinions since such assessments could impede worker’s attitude towards his or her occupation. Moreover, the American Civil Right Act of 2005 broadly interprets the sense of the employees’ religious beliefs and practices. Therefore, the particular faith of the employee should not be limited by the organization operations and religions stands. However, an employee does not commit an unlawful employment practice by employing and classifying individuals on the basis of their religion in religion is a Bona Fide Occupational Qualification (BFOQ) and is reasonably necessary to the normal operation of a particular business or enterprise.

The religious intolerances in Saudi Arabia extend to various areas of society, including the workplace. The government official discriminates against members of the non-Sunni community in employment decisions, especially Shi’ite Muslims, who face numerous restrictions on the public practice of their religion and encounter discrimination in all areas of public sector employment. The government’s strict control over the interpretation and application of Islam has had a particularly profound effect on women in the workforce. Religious-based directives limit women’s right to choose their line of work. Women are prohibited from studying professions such as engineering, journalism, architecture, and make up only 5% of the workforce. They are also segregated from men in public and barred from most workplaces.

Probation, Contract Duration

The employee may be terminated for any reason at the convenience of the employer, and the employee has no rights to complain or expect the employer to reinstate him at this period.

In Saudi Arabia, an employment may specify a probationary period of up to ninety days for any new employee. The requirement of a probationary period and its terms are part of contractual agreement, otherwise no probationary period will be deemed to exist. According to Article 71, an employer is not obliged to reemploy the worker under probation for more than three months. This policy is in respects to employability at a monthly rate, meaning that the workmen cannot remain under probation or retained by the same employer more than ones.

An employee may be made to serve only one probationary period unless the by agreement of the parties where the second period is for a new position. Article 73 indicates that either party can cancel the employment contract during the probationary period without incurring the obligation to pay damages to the other. Where one party fails to adhere to the prescribed notice period after cancelation of the contract, he must compensate the other party an indemnity equivalent to the remainder of the terminated work-period. Concerning the non-Saudis, all employment contracts are deemed to be for a definite term. If the employment contract itself is independent to time, the term will indicated on the employee’s visa. This is a critical variation from prior practice.

In U.S., the individual labor contracts are either verbal or written for a definite or indefinite period. Without a written instrument, the work card proves the existence of a single labor contract.  Again, no individual contract may provide for standards contrary to those established by legislation or by corporate contracts (Campbell v. Campbell, 2010). Changes in the ownership or legal character of an enterprise do not affect the validity of an individual labor contract.

Chapter 7 of the U.S. labor laws states that an employee may terminate his work contract without notice, and without waiving his rights to severance pay. This is if he is required to perform work superior to his strength, involving great risk, or contrary to law or to his contract, or if he is subjected to ill treatment by his supervisors or to reduction of work hours with detriment to his pay.

According to U.S. Labor Law, a judicial determination of a violation of law subjects the employer to probation or even revocation of the working licenses. In the case where the employer hires unauthorized workers, his licenses may be suspended and three years’ probation on top. The employer must submit a signed affidavit with the country attorney within three business days, stating that the employer has sacked all foreign workers and that the employer will not intentionally employ illegal workers.

Commonality between the U.S. and Saudi Labor Laws

Due to differences in the Labor Laws between these two countries, they share few similarities in the labor-related matters. In U.S., the service award is given to the employee after service of not less than two consecutive years (O’Kane, 2014). In Saudi Arabia, the workers increase their opportunities to be absorbed by a responsible employer after providing sufficient services to the current employer without having commotions with him.

According to Article (258) of the Saudi Labor Law, an employee may terminate the contract from mistreatment from the employers by reporting to the nearest judicial body. In the United States, an employee may terminate the contract with the foundation cause of terminating, which should be reviewed by the federal courts.

For both countries, an employee receives no end-of-service awards for quitting job without coverage of two years. The end-of-service awards are calculated in wages that include overseas premium, basic salary and the benefits. However, bonuses are non-inclusive to the actual payments in both cases.

Conclusions and Recommendations

The comparison between the U.S. and the Saudi indicates the relation to the definition of the labor laws, provisions in different chapters, and the supportive evidence through the case examples. Stringent protection of the employees and employers is an indication of the aggressive labor protections in both countries. In Saudi Arabia, the provisions are not consistent with the domestic labor laws in U.S. Although the language of labor provisions is similar, each country has its way of protecting the foreigners and domestic employees. The study indicates that labor laws should be reviewed to develop consistencies between nations. Such textures will provide bilateral working agreements, hence a reasonable action to enhance capacity building as well as curbing the unemployment in the world.


Brennan, D. (2014). Life interrupted: Trafficking into forced labor in the United States. Durham, NC: Duke University Press Books

Brown, R. C. (2010). Understanding labor and employment law in China. Cambridge: Cambridge University Press.

Campbell v. Campbell, Utah App ( LexisNexis2011). Legal aspects of doing business in the Middle East. Huntington, NY: Juris. Retrieved from LexisNexis Academic database.

Champion, D. (2003). The paradoxical kingdom: Saudi Arabia and the momentum of reform. London: Hurst.

Chaudhry, K. A. (2008). The price of wealth: Economies and institutions in the Middle East. Ithaca [u.a.: Cornell Univ. Press.

Lerrick v. Mian, Utah App (LexisNexis 2010). Retrieved from LexisNexis Academic database.

Morrison, O. F., & United States. (2001). Labor law and practice in. Washington: U.S. Government Printing Office.

O’Kane, M. (2014). Saudi Arabia labor law outline. Sharjah, United Arab Emirates: Al-Andalus Publishing.

Public Affairs Information Service. (2000). Public Affairs Information Service bulletin. New York: Public Affairs Information Service.

United States. (2002). Labor law and practice in. Washington: U.S. Government printing office.