Officials from the Ministry of Labor (MoL) are set to meet with local businessmen on Tuesday to discuss details regarding the implementation of the new wage protection program.
The program, which has already been partially implemented, stipulates that employees should receive their salaries via bank accounts. Establishments are also required to provide the ministry with the payroll details of their workers, including the date in which salaries are deposited.
This move was enacted to ensure that workers are paid their salaries in full and on time, as delayed payment is a frequently heard complaint from expatriate workers.
The ministry initially plans to enforce the program only in companies with more than 3,000 workers. However, Saudi and foreign private schools will also fall under the new regulation irrespective of the number of workers they employ.
During the meeting, the ministry officials will provide businessmen with greater details regarding the new payment regulation and how the ministry plans to implement the new system.
Aside from ensuring the prompt payment of salaries, the regulation is expected to weed out unethical practices resorted to by some companies that provide false data on Saudization in order to get out of the Red category of the Nitaqat nationalization scheme, a daily newspaper reported quoting a ministry official.
The Riyadh Chamber of Commerce and Industry (RCCI) also plans to host a workshop on the topic of wage protection the same day. “The workshop aims to familiarize businessmen with details concerning the wage payment regulation and also to discuss problems that may arise when the regulation is implemented,” said Mansour Al-Shathri, chairman of the human resources committee of the RCCI.
Mutlaq Al-Hamadan, a Saudi retailer, said he was not optimistic about the outcome of the implementation of the ministry’s decision.
“The ministry’s decision will create many problems for private establishments, which used to pay employees their salaries in cash. At least 4 million workers will have to open new bank accounts at once, which in turn will create difficulties for banks themselves,” he argued.
Workers will have to go in person to open a bank account, which will create unprecedented crowding at banks, reminiscent of the crowding witnessed at labor and passport offices in recent months, he added.
Large establishments with more than 3,000 workers and private schools have begun submitting their payroll files to the ministry online since the beginning of the month.
The updated database of companies’ employees will enable the ministry to monitor any violation in salary disbursement operations. The ministry will also check to what extent establishments are adhering to regulations.
A ministry official said on an earlier occasion that the wage protection program would attract more Saudi workers to the private sector, in which they currently account for only 20 percent of the total work force.