Riyadh - SPA

Companies with at least 1,000 workers are being given four more months to implement a
wage protection system that was introduced by the Labor Ministry last year in a bid to
ensure employees’ rights.

The ministry’s decision to postpone the implementation of the fourth phase of the
protection bill for companies with more than 500 workers, originally scheduled for July
1, to Nov. 1 was taken after the Saudi Arabian Monetary Agency (SAMA) demanded that
pressure be eased on the Kingdom’s banks, which have been tasked with salary payment
under the new system.

The wage protection system involves creation of a database containing updates on wage
payment in the private sector. Information includes the amount and date the salary was
paid. The new system also stipulates that salary payment should be made solely through
banks.

Phase 1 involved companies with more than 3,000 workers. A total of 119 companies
fulfilled conditions out of 184 companies in that category, while 48 companies pledged
to submit their updated data soon after the deadline and 17 had services halted by the
ministry for failure to comply with the new system.

Phase 2, which was implemented on companies with more than 2,000 workers, saw 81
companies fulfill the ministry’s demands and 13 penalized for failure to comply, while
17 companies had services resumed after complying past the deadline.

“Only 445 private schools out of a total of 1,183 schools fulfilled the criteria,”
Ministry of Labor undersecretary said. “Services to 713 have been suspended, while 25
schools had services resumed after updating their information.”

Companies that fail to comply with the regulations within two months of the deadline
will have their services suspended. Renewal of work permits, however, is not affected by
these suspensions.

Employees working with companies that fail to comply three months past the deadline can
transfer to other companies without the permission of their employers.