Saudi Arabia’s new wage insurance: A milestone in worker protection 
The Ministry of Human Resources and Social Development and the Insurance Authority have launched the expatriate worker wage insurance service for private sector defaults.
This initiative strengthens the Kingdom’s commitment to protecting the financial rights of workers, while helping employers create a fair, competitive, and secure labor market.
The insurance service ensures that expatriate workers will receive their wages, in the rare cases where employers are unable to meet their obligations. To facilitate this, the ministry has assigned an insurance company to handle compensation claims by expatriate workers, in accordance with the terms and benefits defined by the insurance policy.
This initiative is not only about worker protection; it is connected to Saudi Arabia’s broader economic transformation.
The Kingdom’s labor reforms are already driving positive change. The overall unemployment rate, which includes expatriate workers, fell to 3.3 percent in the second quarter of 2024, down from 4.1 percent in the previous year.
This indicates that reforms aimed at job creation and worker protection are having a tangible impact on the economy.
As the country continues to attract world-class global talent, these reforms are helping to power the Kingdom forward. To maintain this momentum, it is essential to continually evaluate and improve the labor market to make sure it remains competitive and fair for the workforce.
The launch of wage insurance is further proof of Saudi Arabia’s commitment to creating a labor market that is not only competitive but also fair and just for all workers.
The new insurance service is just one part of a much wider program of labor-market reform. For example, the 2021 Labor Reform Initiative made it easier for expatriates to manage their employment relationships and transfer between employers, and the Wage Protection System ensures all workers receive their wages electronically and on time.
Digital transformation has also played a significant role in modernizing the labor market. Platforms like Musaned and Qiwa have streamlined employment processes, offering expatriates access to standardized contracts and efficient solutions for resolving issues. The Musaned platform has revolutionized recruitment for domestic workers, while Qiwa, a platform designed to help businesses operate more efficiently, has enhanced transparency across the private sector.
These reforms have received significant recognition from leading global entities, including the International Labour Organization, which acknowledges Saudi Arabia’s progress in enhancing its labor market.
The launch of wage insurance is further proof of the Kingdom’s commitment to creating a labor market that is not only competitive but also fair and just for all workers.
As Saudi Arabia continues to prioritize worker rights and enhance its labor practices, the Kingdom is making significant strides toward realizing the broader goals of Vision 2030.
The launch of the wage insurance service is a key milestone on the path to becoming a global hub of opportunity, where expatriates and locals alike can build their futures in a safe, supportive, and dynamic environment.
• Ahmed Al-Sharqi is the deputy minister of labor affairs at the Ministry of Human Resources and Social Development.
