February 13, 2017

Other employment law developments in the Kingdom of Saudi Arabia

Please see below a roundup of other developments in the Kingdom in relation to the National Budget and Workforce Nationalisation.

National Budget introduces fees for dependants

Within its National Budget announced in January 2017, KSA introduced increased visa fees for foreign nationals (where bilateral agreements are not in place) and also announced new fees payable by expatriate workers who sponsor their dependants to reside in the Kingdom. The Government's aim is to increase revenues generated through fees as these currently account for only 17% of Government revenues whilst the majority of G20 countries generate over 70% of their revenues through fees. 

These fees will start to be levied from July 2017 and increase on an incremental basis as follows:

  • From July 2017 the expatriates will have to pay SAR 100 every month for each dependant.
  • In July 2018 the expatriates will have to pay SAR 200 every month for each dependant.
  • In July 2019 the expatriates will have to pay SAR 300 every month for each dependant.
  • In July 2020 the expatriates will have to pay SAR 400 every month for each dependant.

These fees will be payable at the time the residency visas (Iqamas) are renewed and are payable by the non KSA national employee sponsoring dependants and not his employing company. Employers remain liable (in accordance with article 40(1) of the KSA Labour Law (Royal Decree No D/51) dared 23/8/1426 AH as amended by Royal Decree No D/24 dated 12/5/1434 AH) for payment of all fees associated with employee work and residency authorisations. Such costs include the costs of recruitment, fees for issuance and renewal of his residency and work permits, any delay fines, professional title changes, exit and re-entry visa fees as well as repatriation tickets on termination of employment.

Workforce Nationalisation: Saudisation

As many of our readers will know, weighted Nitiqat was due to be implemented on 12 December 2016 but was postponed. The new date for implementation has not yet been published and in the meantime, employers are advised to consider how the potential weighting criteria would affect their ability to meet their designated Nitiqat quota.

In the meantime, the Ministry of Labour and Social Affairs launched the citizenship account programme in January 2017 which provides for Saudi citizens with dependants to apply for assistance by way of additional allowances payable through the programme to supplement their incomes.

Finally, in an interesting development, the Ministry of Labour has now published what effectively amounts to job descriptions for each of the reserved roles for Saudi nationals and stated that it will examine the actual role performed by any non KSA national to see if they are effectively doing a reserved role under a different title.