Pay SR2,400 or lose expats, ministry tells violating firms
Fatima Muhammad
Saudi Gazette
JEDDAH ��� Companies having a workforce of less than 50 percent of Saudi nationals risk losing their foreign workers if they fail to pay SR2,400 for each extra expatriate annually, Labor Ministry spokesman Hattab Al-Enezi told Saudi Gazette Sunday.
He, however, said that the amount, if not paid or paid only in part, will be carried forward to the next year. The money will be collected by the Human Resource Development Fund (HRDF), which will also provide financial support to companies employing Saudis.
The system, he said, is fair to the companies as they have to pay only SR200 monthly for each expatriate while they will get HRDF support for each Saudi they employ with the amount disbursed according to their classification. The Fund will pay amounts ranging from SR2,000 to SR4,000 based on the company���s classification ��� yellow, green, perfect.
This financial support for companies employing Saudis will last for four years, he added.
The Labor Ministry official said expatriates��� rights are also being taken care of under the new system, explaining that they can transfer their sponsorship to other companies without the permission of their employers.
The decision, he hoped, would reduce the discrepancy between salaries of Saudis and expatriates and also increase the level of nationalization in institutions and industries.
Mohammad Suwailih, a member of the Youth Businessmen Committee at the Jeddah Chamber of Commerce and Industry, said that the decision will only add to the number of new businesses that are closing or leaving the market.
Before this decision small businesses were already struggling with time-consuming procedures that different government departments are asking them to abide by, he said. On top of that there are 11 payment procedures that new businesses have to fulfill, including renewal of iqama, visa, Zakah, social insurance fees.
The decision, Suwailih said, has placed all companies ��� established and startups ��� in one basket which was not fair.
The head of the Consumer Protection Association (CPA), Nasir Al-Tuwaim, said that they are already witnessing increase in prices, especially in the contracting sector. The price increases are justified by the companies as necessary to find ways to pay the new SR2,400 fee, he said. Al-Tuwaim criticized the ministry for arriving at this decision without consultations with them. ���The ministry made this decision without consulting concerned bodies and also without doing any in-depth studies,��� he added.
Al-Tuwaim called for the formation of a general authority for the protection of consumers from ���pop-up decisions.��� He countered criticism against CPA���s inaction to control prices and protecting consumers
Syed Abdul Qadeer Jaffery
Cost Control Dept.
P O Box 9887 Jeddah 21423
Saudi Arabia
Phone: +966 2 6400 004 Extn 5440
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