Saudi Arabia: Ministerial Decision No. 1/5024

Title

Saudi Arabia: Ministerial Decision No. 1/5024

Date of adoption

9 October 2012

Entry into force

13 March 2013

Text versions

Arabic

Source:

– The Ministry of Labor – Kingdom of Saudi Arabia, accessed: 20 January 2014, http://portal.mol.gov.sa/ar/MinisterDecisions/Documents/D_4040_12_10_1432.pdf

Abstract

Keywords: Saudi Arabia, Laws & Regulations, Labour Market, Nationals & Foreign Labor, Nationalisation Work Force

Note: This decision applies to entities. The Saudi Ministry of Labour considers an establishment as consisting of a number of entities depending on the number of different activities it conducts. If, for example, an establishment conducts two different business activities such as transport and retail then it is considered to consist of two entities.[1]

Without prejudice to the program for encouraging establishments to nationalize jobs “Nitaqat”, each entity which employs nine employees or less must employ at least one Saudi National. The Saudi National must be registered in the Social Insurances program and must not be included in another establishment’s nationalization percentage. The employer may be considered as an employee in the entity if s/he is not included in another entity’s nationalization percentage. Moreover, any of the partners in the company that owns the entity may be considered as an employee so long as s/he is registered with the Social Insurances program and is not included in another entity’s nationalization percentage (Art. 1).

Entities that employ nine employees or less that comply with the above conditions are considered to be in the Green Zone and are subject to its rules in accordance with the Nitaqat Program (Art. 2).

Entities that employ nine employees or less that fail to comply with the above conditions are considered to be in the Red Zone and are subject to its rules in accordance with the Nitaqat Program (Art. 3).

For the purposes of this decision, the rules of Ministerial Decision No. 1/4624 dated 21/10/1433 H regulating the calculation of monthly wages and special categories in the Nitaqat Program shall apply (Art. 4).

Entities that employ nine employees or less which are part of a consolidated entity in accordance with the Nitaqat Program are subject to its rules and are excluded from this decision (Art. 5).