'Saudization' of smaller businesses in plans to boost employment

Published October 16th, 2012 - 12:28 GMT
The Kingdom is introducing another round of 'Saudization' in an effort to increase employment
The Kingdom is introducing another round of 'Saudization' in an effort to increase employment

Labor Minister Adel Fakeih yesterday announced his ministry’s decision to include small enterprises with nine or less workers in the Nitaqat system as part of government’s move to create more jobs for Saudis.


Every firm in this category should employ at least one Saudi permanently and register the worker’s name in the social insurance scheme,” the minister said in a statement.


The ministry had earlier excluded such small firms from the Nitaqat system, considering the efforts of young Saudi businessmen.


“We have now included such SMEs in the Nitaqat system to complete the phase of quantitative Saudization of jobs,” Fakeih said.

The minister also announced that the implementation of qualitative Nitaqat, encouraging companies to pay a minimum monthly salary of SR 3,000 to Saudis, would start in Rabiul Awwal next year.

In accordance with the new qualitative system, a Saudi worker in the private sector should be given a monthly salary of at least SR 3,000 to account the worker as a “full” Saudi employee for the Nitaqat system.

“Those Saudis receiving SR 1,500 and above will be calculated as “half” worker and those getting less than SR 1,500 will not be counted at all for Nitaqat,” Fakeih said, while explaining new regulations aimed at making the private sector more attractive to Saudis.

A Saudi student working part-time in a private firm would be counted as a “half” worker on condition that the company pays a monthly salary of SR 1,500 and social insurance premium. A part-time worker would not be counted for Nitaqat if the employee works for more than two institutions.

“The ministry will compare the salary of Saudis and their foreign counterparts in a firm at a later stage and take this matter into consideration while calculating Nitaqat,” Fakeih said.

The ministry said that the new system will reduce the phenomenon of tasattur or illegal coverup businesses run by expatriates. Such businesses prevent thousands of Saudis from getting employed.


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