Article 145 of the Saudi Labor Law
المادة 145 من نظام العمل · الباب الثامن: الوقاية من مخاطر العمل والوقاية من الحوادث الصناعية الكبرى وإصابات العمل والخدمات الصحية والاجتماعية
The article allows an employer, with the Minister's approval, to establish a savings fund, provided workers' contribution is voluntary and the rules governing its operation are announced.
Official text (Arabic)
This article has not been amended since the law was issued.
يجوز لصاحب العمل بعد موافقة الوزير إنشاء صندوق للتوفير والادخار، على أن تكون مساهمة العمال فيه اختيارية. ويجب إعلان الأحكام المنظمة لكل ما يتصل بقواعد عمل هذا الصندوق.
This is the official Arabic wording, the only legally binding version. We do not translate the law itself; the explanation below is ours. Official source: Bureau of Experts at the Council of Ministers
Article 145 explained in plain English
Article 145 comes within the provisions on health and social services in Part Eight of the Labor Law, and addresses one means of social welfare for workers: the savings fund. The article does not require the employer to establish this fund; it makes it permissible, at the employer's discretion, but sets 3 basic controls for it:
- The Minister's prior approval: the employer may not establish the fund on its own; the Minister's approval must be obtained before it is established.
- Voluntary worker contribution: no worker may be forced to join the fund or have amounts deducted from his wages for it against his wishes; joining is a decision for the worker alone.
- Announcing the governing rules: the employer must announce all provisions governing the operation of the fund, so that the worker knows its terms and how it works before deciding to contribute.
In practical terms, this article protects the worker in two ways: it prevents the fund from turning into a compulsory deduction from wages, and it guarantees transparency by requiring the rules to be announced rather than left vague or subject to the employer's discretion alone. In return, the article gives the employer a way to offer an additional benefit that encourages workers to save and strengthens their stability.
This article complements the ones before and after it: Article 144 requires the employer to provide preventive and curative health care to workers, and Article 146 requires it to provide living and social services for those working in places far from populated areas, such as stores, schools and mosques. Article 145 differs from them in being a permission, not an obligation, since establishing the fund remains optional for the employer just as contributing to it remains optional for the worker.
The article does not set the details of managing the fund, contribution percentages or how savings are paid out; these matters are subject to the rules the employer announces after the Minister's approval. Anyone with a dispute about an existing fund in their establishment should refer to its announced rules or consult a lawyer specialized in labor cases.
Practical example
An industrial company in Dammam decided to establish a savings fund for its workers. It applied to the Minister and obtained his approval, then announced the fund's governing rules on the notice board and by email, including how to join and the conditions for withdrawal. Ahmed joined the fund voluntarily, while his colleague Khalid refused to join. Here the company has no right to deduct any amount from Khalid's wages for the fund, because Article 145 requires workers' contribution to be voluntary, and it may not apply unannounced rules to Ahmed's savings.
Translated from our Arabic explanation with machine assistance. For guidance only; it does not replace advice from a lawyer on your situation.
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Active contributorFrequently asked questions about Article 145 of the Saudi Labor Law
Is the employer required to establish a savings fund for workers?
No. Article 145 makes establishing the fund permissible for the employer, not obligatory, and it requires the Minister's prior approval to establish it.
Can a worker be forced to join the savings fund?
No. The article expressly provides that workers' contribution to the fund is voluntary, so a worker may not be required to join or have amounts deducted from his wages for the fund against his wishes.
What must the employer do after establishing the fund?
It must announce all provisions governing the rules of the fund's operation, so that workers know its terms before deciding to contribute.
Does Article 145 set contribution percentages or how savings are paid out?
No. The article does not contain these details and leaves them to the rules governing the fund, which the employer must announce after the Minister approves its establishment.
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The texts are reproduced from the official website of the Bureau of Experts at the Council of Ministers for reference; where they differ, the officially published Arabic text prevails. This content is not legal advice.