A new wage protection system is to be implemented from Sunday in the Kingdom.
All business organizations with more than 3,000 workers will be required to disburse the salaries of their employees through bank accounts. Apart from larger organizations, private schools, including foreign and international schools in the Kingdom, will also be required to adhere to the system irrespective of the size of the work force.
The Ministry of Labor and the Saudi Arabian Monetary Agency (SAMA) is jointly working on the system.
The new system is aimed at creating a database of employees to ensure timely salary payment in the private sector.
The system will also help authorities track the difference in wages between Saudi and non-Saudi employees.
The system has been in operation on an experimental and evaluation basis. It is being made mandatory from September.
The sixth and final phase will begin on Oct. 1, 2014, when small organizations of 100 employees will be included.
The system has largely been adopted by construction and maintenance companies, but private schools are not in favor.
Abdullah Radwan, a prominent contractor in Jeddah and chairman of the contracting committee at the Jeddah Chamber of Commerce and Industry (JCCI), welcomed the decision of the Labor Ministry and said that the new system will unearth irregularities in several companies.
Mohammed Al-Zamil, chairman of the lawyers subcommittee at the Riyadh Chamber of Commerce and Industry (RCCI), also welcomed the new system, saying it will help expose cover-up practices by companies and prevent fraud.
Private schools, however, have a different opinion on the proposed system.
With 3,450 private schools in the Kingdom and 40,000 employees, most of them women, enrolled on the payroll, private schools are struggling to maintain the mandatory minimum salary for Saudi women teachers, which stands at SR5,600