Saudi Arabia: Immigration Bulletin – New System to Track Payment of Salaries
Government plans to launch system in May 2012
Saudi Arabia plans to introduce a new tracking system to monitor the payment of employee’s salaries. The system is to be launched in May 2012 and it will keep track of foreign workers as well as Saudi employees, ensuring that their monthly salaries are transferred to their bank accounts in line with the terms specified in their employment contracts.
In an interview with Reuters, Adel Fakieh, the Minister of Labour, said in February that the program will be rolled out gradually. “In the first phase it will be applied to large companies; this will be within two months or three at the latest.” Smaller firms will be monitored at a later stage and in a year’s time all companies will be registered.
The new system, designed in cooperation with the Central Bank of Saudi Arabia, will help authorities to rate companies not only according to the ratio of Saudi citizens they employ, but also based on the proportions of their payrolls being paid to Saudi citizens. A scheme similar to Nitaqat will be introduced to encourage companies to appoint Saudis to higher and better paid positions.
Fakieh stressed that the activities of the Ministry of Labour are not designed to limit the size of the kingdom’s large foreign workforce or to reduce the issuance of work visas. Instead, the system aims to encourage the recruitment of Saudi nationals and to stop the country’s increasing unemployment rate.
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