Nitaqat to enforce minimum salaries for citizens

Saudi employees in the private sector receiving salaries of SR 1,500 are viewed as “half workers” in their companies’ Saudization records in the Nitaqat system, while Saudis receiving less than that amount are not included at all when calculating their firms’ Saudization percentage, said Minister of Labor Adel Fakeih at a press conference in Riyadh yesterday.
The minister said the Cabinet’s decision to regulate the calculation of monthly wages will be implemented by Feb. 2, 2013 and will be aimed at improving work environment and tackling the issue of low wages. It will stipulate a minimum wage of SR 3,000 for Saudis and specify conditions for calculating Saudization quotas.
According to the decision, only Saudis who receive the minimum wage are included as one Saudi worker in a firm’s Saudization record under Nitaqat. The way to calculate the Saudization quota in the case of having Saudi workers receiving less than the minimum wage will be specified when the decision is implemented.
The decision will benefit those working on a part-time basis, students, those with disabilities who are able to work and released prisoners, said the minister, adding that the ministerial decision was announced three months ago, which gave establishments a period of five months to take the necessary measures.
According to a ministry statement to SPA, the Wage Protection Program will be implemented gradually by March 1, 2013. The ministry will enforce the program by requiring companies to file their employees’ wage data. Firms that delay the filing of their wages data for two months will be subject to sanctions that include denying them all of the ministry’s services except for work licenses service. If the delay was for more than 3 months, with the continuation of blocking the ministry services, the late companies’ workers will be allowed to transfer their services to other employers without their approval.
The ministry said the decision will be implemented according to the following schedule: Firms with 3,000 workers or more will be required to file the data by June 1, companies with 2,000 workers or more will be required to do so by Sept. 2, establishments with 1,000 workers or more will be required to file their wages data by Dec. 3. Those with 500 workers or more, 200 workers or more and 100 workers or more will be obliged to file their data by March 4, 2014, July 5, 2014 and Oct. 6, 2014, respectively.
On Sunday, the minister said the decision to impose a monthly SR 200 fee for each foreign worker includes only firms employing more foreigners than Saudis. (If a company’s number of foreign workers exceeds the number of Saudis then they will be included in the decision. Even with companies having more foreigners than Saudis the fees are only imposed on the excess number of workers. Others who have more Saudis than foreigners will not be included in the new fees decision.)
He said that after the fees decision, another one increasing government support for Saudis’ salaries in the private sector from SR 2,000 to SR 4,000 (amounts the government pays as part of each Saudi employee’s salary in private companies) will follow. The support period will be also extended from two to four years, he said.
The minister spoke in a meeting with the public in a Jeddah hotel after he did the same in Riyadh about two weeks ago.
He said that about 11 percent of small establishments in the country are thought to be involved in visa trafficking, and that 31 percent of them (small establishments in the country) cover up illegal labor (Tasattur, cover up businesses).
There are countries where a foreign worker has to pay SR 20,000 annually to be allowed to work in the country, he said as he commented on the new labor fees. The new fees’ revenues would cover the expenses of Hafez unemployment program by 2015. Foreign labor in the Kingdom cost the country SR 23 billion annually, six times the amount disbursed for the training of Saudis, he said.
The minister said the fees decision would only marginally affect the purchasing power. "Traders' talks of 'damage' to the economy and 'price hikes' is only an exaggeration,” he said, stressing that members of society have to collaborate with the authorities to combat unemployment and price hikes.
“The meeting was open and public interest was the theme of it. The minister explained the new fee decision, then allowed discussions and took questions. He did not use the meeting to impose his view,” said one of the attendees.