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Employment, Pensions & Immigration
In a move to support its national population, Oman has recently published a new law¹ regarding compulsory insurance for Omani nationals in situations where employment is terminated for purely business reasons. In this article, we provide a summary of the provisions of the law, and the implications on employers following the introduction of this new piece of legislation.
The new legislation appears to cover a broad spectrum of employers. This includes public sector employers, such as civil, military and security arms of the government, and all private sector employers.
In terms of employees, all Omani nationals working for the above employers are required to be insured under the new law.
Yes, contributions have to be made by both parties. Contributions are based on a percentage of the employee's monthly wage, being basic plus regular allowances and follow the same calculation used in the Retirement and Social Insurance Law². Contribution requirements under the job security insurance law are as follows:
In order to qualify, the insured employee must meet the following conditions:
The insured employee, on qualifying for the benefit, receives a monthly payment for a maximum period of 6 consecutive or non-consecutive months. The amount received will depend on the overall contribution made, but the law provides for an amount of 60% of the contribution made within the 24 month period preceding the date of termination, or the subscription period, if less than 24 months, providing the amount received is not less than any minimum pension set by the Retirement and Social Insurance Law.
The payment start date is determined by a specialised committee, to be formed pursuant to the new law. The committee is also charged with determining the cases where termination is considered as collective termination.
Aside from the requirement to make the statutory contributions set out above, private sector employers are also required, pursuant to the new law, to inform the Ministry of Labour of their intention to make collective terminations not less than 3 months prior to the proposed date of termination. Failure to comply with such requirement may lead to additional charges being levied on the employer.
The law comes into effect on 1st November 2020, save that the requirement to commence payment of the contributions commences on 1st January 2021 and the minimum prescription periods will be in effect from 1st November 2021. It is also expected that further regulations to law will be issued in due course.
¹Sultani Decree No. 82/2020
²Sultani Decree No. 72/1991, as amended