New rule to raise private sector wages

The Ministry of Labor is preparing a comprehensive list to raise Saudi wages in the private sector by amending the Saudi average calculation system in the labor market. The list aims to raise the minimum wage for Saudis in the Nitaqat program. Saudis will get SR4,000 instead of SR3,000 and SR6,000 instead of SR4,000. If the employee receives SR6,000 and more, the average Saudi calculations in the nationalization program will be raised.
Calculating the average nationalization rates will be done scientifically: If the salary of a Saudi national exceeds SR6,000 and reaches SR12,000, he will be counted in the system as two employees.
The ministry stated earlier that each Saudi employee who gets SR3,000 will count as one employee. Those who get SR1,500 count for half an employee, while those getting less than SR1,500 will not be counted at all in the Nitaqat program.
These amendments are in line with the government’s policy to encourage facilities to employ more Saudis in highly paid jobs that offer better incentives. They also aim to reward facilities that employ Saudis in good jobs by increasing nationalization rates according to the salaries of the employees.
The list, which will be approved soon, defined the rules of application. It stipulated that Saudi employees who count as one employee should receive no less than SR4,000 a month, while those getting SR2,000 will be counted as half a national employee.
The list also stated that Saudi employees with less than SR2,000 will not be counted in the nationalization rates. Employees with salaries of SR8,000 or more will be counted as two national employees.
The ministry said the rules of this decision apply to all non-Saudi workers who are treated as Saudis in the Nitaqat program, following the example of the Gulf citizens.
The Ministry of Labor will apply the total amended system in calculating nationalization rates, based on the data from the Ministry of Interior and the General Organization for Social Insurance (GOSI).
The average total for nationalization rates will be calculated according to the total average of the past 26 weeks of amendment rates.
The ministry stated that nationalization rates will be calculated according to the average number of Saudi employees and those treated like them divided by the total number of employees, and the total number of non-Saudi workers during the time of calculating the average number of the facility’s nationalization percentages.
The total percentages are then divided by 26 which is the total average nationalization percentage.
The ministry stated that if the establishment was newly founded and hasn’t completed the 26-week requirement, the weekly percentages will be calculated from the date of establishment until the time of calculating the nationalization percentages. The total sum is then divided by the number of working weeks, which is the total nationalization percentage.
The total nationalization percentages are calculated with the same method with regards to small establishments. If the establishment has less than 10 employees, and the number increases later on, nationalization percentages will be defined by calculating the average number of Saudi employees for the past 26 weeks.
The ministry stated that the actual number of expatriate laborers should be calculated in the nationalization percentages from the date of their arrival in the Kingdom. Expatriates should be stricken from nationalization calculations as soon as they leave the Kingdom through a permanent exit visa.