In light of the ongoing economic developments in the Kingdom of Saudi Arabia, and the Kingdom's efforts to improve the work environment and protect the rights of all workers, the Wage Protection Initiative was launched, which is one of the most important initiatives that ensures the regular and accurate payment of wages for all workers in the private sector.
Given the importance of this initiative and its main role in organizing the payment of wages to improve the work environment and increase trust between workers and the reasons for work, you must be aware of everything related to wage protection in Saudi Arabia, so continue reading with me in this article.
The Wage Protection Program is an initiative launched by the Ministry of Human Resources and Social Development in Saudi Arabia in 2013. This program aims to monitor the payment of wages for all workers in the private sector, whether this person is Saudi or expatriate, and also seeks to ensure that wages are paid on time and at the agreed value.
This program creates an updated database that includes information on employee wages to monitor the extent of companies' commitment to this, which contributes significantly to reducing and reducing wage payment violations, enhancing transparency, and preserving the rights of employees and employers.
The Wage Protection Program aims primarily to provide a safe and appropriate environment that is transparent and guarantees and preserves rights for all parties in the private sector. This program has many other benefits, most notably:
The Wage Protection Program works to enhance the transparency of wage payment processes, ensuring that employees receive all their dues on the agreed-upon time, which enhances their financial and psychological stability.
This system works to reduce disputes between employees and employers related to delayed or manipulated wages, as this program allows government agencies to verify and review wage data.
Commitment to paying wages on time contributes significantly to building a healthy work environment, as employees feel safe and confident in their employer, which greatly increases the productivity and loyalty of these employees to the institution.
The presence of a reliable wage protection system works to enhance investors' confidence in the work environment in Saudi Arabia and also works to encourage them to invest and grow, due to the existence of comprehensive protection for all employee rights.
As the wage protection program primarily helps in detecting irregular employment and commercial cover-up, this happens through salary tracking and financial obligations, which enhances the economic system.
As the wage protection system is in line with the goals of Vision 2030 due to enhancing transparency, achieving justice in the labor market, and raising the competitive level in the work environment as well.
To join the wage protection program, some basic conditions must be met, the most prominent of which are:
1_A bank account must be opened or a salary disbursement card must be issued for each employee through the facility through local banks.
2_Using a specialized company that provides wage protection services such as Etmam Company to carry out this process properly and to the fullest extent.
3_Employee data must be updated periodically and the General Organization for Social Insurance must be notified in the event of any change.
4_Fines are imposed if the employer is late in paying salaries on the specified date.
5_ Workers must commit to their role and be aware of their salary documented through the system. They also have the right to file complaints in the event of a discrepancy or delay.
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Through this program, the commitment of employers to disburse monthly salaries to workers in the private sector is monitored by the agreements that have been agreed upon, and this process proceeds according to a specific mechanism, which is:
1_The institution must register with the Wage Protection Program, provided that the number of employees in it is more than 10 employees.
2_Upload all monthly salary data via the electronic system, and this data must match the employment contracts.
3_Salaries are paid through approved banking channels, and proof of the payment process must be provided via payment reports that are uploaded via the system.
4_The Ministry verifies that these payments are consistent with the registered salaries as agreed upon in the employment contracts, and also tracks any delay or shortage in wages.
5_Follow up and monitor any violations related to delay or shortage of salaries and take the necessary measures.
6_The main goal of the program is to protect workers' financial rights, which mainly helps in improving the work environment in the private sector and ensuring stability.
Some categories must adhere to this system and the rules related to paying salaries, the most prominent of which are:
1_ Establishments that have 10 or more employees.
2_ Establishments that deal with non-Saudi workers if they have 10 or more employees.
3_ It also includes workers, whether temporary or permanent.
4_ Establishments affiliated with the private sector and not the government sector.
5_ Workers who receive their salaries through bank transfers.
6_ Establishments that face difficulty in adhering to the payment system, especially since they do not use banking channels, so the payment process must be recorded electronically.
The Ministry of Human Resources and Social Development in Saudi Arabia has updated the Wage Protection System to improve the work environment and also protect the rights of workers. These updates include:
1_ The extent to which work establishments adhere to this system.
2_ Clarity of details that enable the company to know the rejected records, the reason for this rejection, and the type of violation.
3_ Rejecting any file that contains a violation or does not conform to the system and standards.
4_ Records will also be rejected if they contain a salary that does not match the basic salary if there are negative values, and if the total salary is zero.
5_ Violating the laws and not paying wages on the specified date affects the company's commitment.
6_ The company's commitment is determined based on the company's commitment to transferring wages on the specified date.
7_ If the company does not comply with the laws and continues to violate them, its services will be suspended.
Doing any of the following is considered a violation according to Saudi laws:
1_ Paying the worker's wage more than once in one month.
2_ Failure to pay the workers' wages on the specified date.
3_ Deducting more than 50% from the employee's salary.
4_ Increasing more than 20% of the employee's salary without documenting and reviewing it according to the wage protection system.
5_ If the employee's salary is not consistent with the salary registered in social insurance.
From the above, we have seen the importance of the wage protection program in ensuring workers' rights and also protecting wages from delay, which contributes fundamentally to enhancing the work environment and achieving stability in the Saudi labor market. As the Kingdom continues to develop its policies to ensure justice and transparency in all financial transactions between workers and work reasons, it has become necessary for all establishments to join the wage protection program and adhere to the laws, so you will not find better than Etmam Company to help you do this task.
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Yes, according to the Saudi wage protection system regulations, establishments with 10 or more employees are obligated to register, whether this establishment is Saudi or foreign.
The percentage of commitment to the wage protection program varies from one establishment to another, and this percentage is measured based on the extent of these establishments' commitment to recording wage data and updating it in the electronic system regularly according to the specified requirements.
Penalties vary depending on the size of the facility and the frequency of violations. The most prominent penalties include imposing fines, suspending services to the facility partially or completely, or preventing the issuance of any new visas for the facility.
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November 25, 2024
- BY Sultan Al-Qahtani