The third phase of the Ministry of Labor's wage protection system now covers firms with over 1,000 workers, a source said here recently.

Saleh Al-Humaidan, a member of the Asharqia Chamber, said that the wage protection system is not linked to a minimum wage, but was introduced to ensure employers pay their Saudi and expatriate workers on time.

The system is meant to ensure there is a record of payments that could be used to resolve any disputes between workers and their employers. It would also allow the ministry to create an accurate database of the current work force in the country, he said.

The system would also reduce cases of workers being robbed of their money after their employers pay them their wages in cash, he said.

The first phase began on Sept. 1 last year for companies with over 3,000 workers and private schools. The second phase came into effect on Dec. 1 for companies with over 2,000 workers.

The fourth phase begins in July for firms with over 500 workers, the fifth phase in October for firms with over 200 employees, and January 2015 for firms with over 100 employees.

The ministry confirmed that a payment delay of two months would see firms lose all their services, except those related to the issue and renewal of work permits. A three-month delay would result in the ministry cutting all services of a firm, including forcing its workers to move to other companies.

The system makes it mandatory for a firm to report its wages paid at the beginning of each month. It would receive an e-mail reminder to file its report.

If a firm does not do so, a reminder is sent in 10 days. If there is still no response, another reminder is sent in 20 days. If there is no reply after this, the ministry would then raid the company.