Employee Outsourcing Agreement Template for Saudi Arabia

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Key Requirements PROMPT example:

Employee Outsourcing Agreement

"I need an Employee Outsourcing Agreement for our IT services company in Saudi Arabia to provide 50 software developers to a major bank in Riyadh, with service commencement planned for March 2025 and strict data security requirements."

Document background
The Employee Outsourcing Agreement is essential for businesses operating in Saudi Arabia that seek to engage workers through third-party service providers. This arrangement is particularly valuable for companies requiring workforce flexibility, specialized skills, or assistance in meeting Saudization quotas. The agreement must carefully navigate Saudi Arabian labor laws, including the Labor Law (Royal Decree No. M/51), social insurance requirements, and Wage Protection System regulations. The document establishes clear responsibilities between the service provider and client company while ensuring proper protection for outsourced employees' rights. It includes detailed provisions for employee management, performance monitoring, compliance requirements, and risk allocation, making it suitable for both short-term project-based staffing and long-term workforce solutions.
Suggested Sections

1. Parties: Identification of the outsourcing company (service provider) and the client company, including full legal names, commercial registration numbers, and authorized representatives

2. Background: Context of the agreement, including the service provider's expertise and the client's requirements for outsourced employees

3. Definitions: Key terms used throughout the agreement, including 'Outsourced Employees', 'Services', 'Service Levels', and other relevant terminology

4. Scope of Services: Detailed description of the outsourcing services, including recruitment, deployment, and management of outsourced employees

5. Service Provider Obligations: Comprehensive list of service provider responsibilities, including compliance with labor laws, maintaining necessary licenses, and employee management

6. Client Obligations: Client's responsibilities, including workplace safety, access to facilities, and cooperation requirements

7. Employee Management: Procedures for employee selection, deployment, replacement, and performance management

8. Compliance Requirements: Obligations regarding Saudization, labor laws, social insurance, and other regulatory requirements

9. Service Levels: Performance standards, KPIs, and measurement criteria for the services

10. Fees and Payment Terms: Pricing structure, payment schedule, and invoicing procedures

11. Confidentiality: Protection of confidential information and trade secrets

12. Data Protection: Handling and protection of personal data in compliance with Saudi regulations

13. Liability and Indemnification: Allocation of risks and responsibilities between parties

14. Term and Termination: Duration of agreement, renewal terms, and termination rights

15. Dispute Resolution: Procedures for resolving disputes, including jurisdiction and applicable law

Optional Sections

1. Insurance Requirements: Detailed insurance obligations when specific coverage types are required beyond statutory minimums

2. Intellectual Property Rights: Include when outsourced employees may create or have access to intellectual property

3. Non-Competition: Required when there are specific concerns about competitive activities

4. Force Majeure: Include detailed force majeure provisions when operating in high-risk environments or sectors

5. Change Control: Include when services are complex and likely to require formal change management procedures

6. Business Continuity: Required for critical services or when mandated by client's internal policies

7. Exit Management: Include when complex transition arrangements may be needed at contract end

8. Security Requirements: Include for roles requiring access to sensitive information or secure facilities

Suggested Schedules

1. Schedule 1 - Service Description: Detailed description of outsourcing services and specific role requirements

2. Schedule 2 - Service Levels and KPIs: Detailed performance metrics and measurement criteria

3. Schedule 3 - Fee Schedule: Detailed pricing structure, including base fees, overtime rates, and additional charges

4. Schedule 4 - Employee Minimum Qualifications: Required qualifications, experience, and skills for outsourced positions

5. Schedule 5 - Required Documentation: List of required employee documents, certifications, and compliance records

6. Schedule 6 - Approved Subcontractors: List of pre-approved subcontractors if applicable

7. Appendix A - Standard Operating Procedures: Detailed procedures for employee management and service delivery

8. Appendix B - Compliance Checklist: Checklist of regulatory requirements and compliance obligations

Authors

Alex Denne

Head of Growth (Open Source Law) @ Genie AI | 3 x UCL-Certified in Contract Law & Drafting | 4+ Years Managing 1M+ Legal Documents | Serial Founder & Legal AI Author

Relevant legal definitions
Clauses
Relevant Industries

Construction

Information Technology

Oil and Gas

Manufacturing

Healthcare

Retail

Hospitality

Facilities Management

Logistics

Professional Services

Banking and Financial Services

Telecommunications

Relevant Teams

Human Resources

Legal

Operations

Procurement

Compliance

Contract Management

Project Management

Risk Management

Commercial

Finance

Talent Acquisition

Relevant Roles

Human Resources Director

Legal Counsel

Operations Manager

Procurement Manager

Compliance Officer

Contract Manager

HR Business Partner

Project Manager

Facility Manager

Risk Manager

Commercial Director

Chief Operating Officer

General Counsel

HR Operations Manager

Talent Acquisition Manager

Industries
Saudi Labor Law (Royal Decree No. M/51): Primary legislation governing employment relationships, including working hours, leave entitlements, end of service benefits, and termination procedures
Social Insurance Law: Regulates social insurance requirements, including GOSI (General Organization for Social Insurance) registration and contribution requirements for both Saudi and non-Saudi employees
Saudization (Nitaqat) Regulations: Requirements for maintaining specific ratios of Saudi nationals in the workforce, which affects outsourcing arrangements and workforce planning
Anti-Commercial Concealment Law: Ensures transparency in business operations and prevents illegal fronting arrangements in outsourcing relationships
Commercial Agencies Law: Regulates commercial relationships between companies, including service provision and outsourcing arrangements
Value Added Tax Law: Governs VAT implications on service agreements and outsourcing arrangements
Personal Data Protection Law (PDPL): Regulates the collection, processing, and transfer of personal data, including employee information in outsourcing arrangements
Anti-Money Laundering Law: Ensures compliance with financial transparency requirements in business relationships and payment arrangements
Competition Law: Regulates anti-competitive practices and ensures fair business practices in outsourcing arrangements
Wage Protection System (WPS) Regulations: Mandates electronic salary transfer systems and payment documentation requirements
Teams

Employer, Employee, Start Date, Job Title, Department, Location, Probationary Period, Notice Period, Salary, Overtime, Vacation Pay, Statutory Holidays, Benefits, Bonus, Expenses, Working Hours, Rest Breaks,  Leaves of Absence, Confidentiality, Intellectual Property, Non-Solicitation, Non-Competition, Code of Conduct, Termination,  Severance Pay, Governing Law, Entire Agreemen

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