Saudi Arabia penalizes 707 firms for violating wage rules

The Saudi Ministry of Labor has taken penal action against as many as 707 companies

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The Saudi Ministry of Labor has taken penal action against as many as 707 companies and establishments, which failed to implement a mandatory Wage Protection Program.

Abdullah Abu Thunain, deputy minister for inspection and work environment development, said that the punitive measures were taken following raids carried out by inspectors from the ministry during the first week of this month.

“It was discovered that more than 661 firms complied with the ministry’s regulations with regard to applying the program. The ministry suspended all computer services to 82 firms for their failure to implement the program, in addition to halting all services except issuance of work permits to 625 firms for violation of the regulations,” he said.

According to Abu Thunain, penal actions were taken against 38 companies with more than 3,000 staff. Among the total of 198 such companies, the inspectors found that 160 of them were complying with the program.

“Out of a total of 129 companies with more than 2,000 employees, 106 were found adhering to the program whereas penal actions were taken against 23 companies for various violations. As many as 359 companies out of 447 with more than 1,000 employees were found complying with the program,” he said, adding that punitive measures were taken against 88 companies for their failure to apply provisions of the program.

Abu Thunain urged those companies and firms that are not yet registered at the ministry’s portal to do the same at the earliest in order to avert penal actions. He said the employer should send the file concerning monthly disbursement of salaries to the concerned bank and he should obtain a copy of the file duly endorsed by the bank so as to register the file at the ministry’s portal in order to prove that employees have been paid their salaries on time. He urged the companies to update the data with regard to the salaries of employees at regular intervals.

Abu Thunain said the new program aims at creating a better work environment as well as to address problems related to non-payment or delay in disbursement of salaries and allowances in the employment market. According to the official, the program enables the ministry to closely monitor the payment of wages in the private sector through setting up of an advanced data base, which consists of details of disbursement of salaries by employers and fulfillment of their obligations on the basis of the provisions of the labor law as well as the labor contract signed with their workers.

“The ministry will check whether the salaries deposited by employers in their employees’ bank accounts are consistent with the ones mentioned in employment contracts. Also, the ministry will ascertain that the employer is strictly abiding by the regulations to make payment of the agreed salary on time,” he said.

This article was first published in the Saudi Gazette on December 10, 2014.

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