JEDDAH: The Ministry of Labor has from Monday begun applying the 10th phase of its Wage Protection System (WPS) for all companies with 80 or more employees.

A total of 4,087 companies with about 362,000 employees would fall under the 10th phase, the ministry estimated, according to a local media report on Monday.

The WPS is a requirement for all private sector firms, to ensure the timely payment of wages, reduce disputes between employers and employees, and allow the ministry to monitor the market.

The ministry warned that companies failing to comply would be penalized, including having all services suspended. Firms have two months to ensure compliance after the 10 phase comes into force, with the deadline on March 31.

If a company does not comply within three months all services are cut and employees are allowed to transfer to other companies without the approval of their current employer, even if their work permits are still valid.

According to previous reports, employers who delay the salaries of their Saudi and expatriate employees, or who fail to pay contracted amounts, will be fined SR3,000 for every offense.

The program was first introduced in Saudi Arabia for all companies with over 3,000 employees in September 2013, and has been applied gradually over the past two years.

Employers must open local bank accounts for their employees, set up a payroll file authenticated by the bank, register with the WPS, and submit all information related to the monthly payment of wages to the ministry using its e-services portal.

Companies can access information about deadlines and requirements on the ministry’s website. More information can be found on the ministry’s website at www.mol.gov.sa.