The Ministry of Human Resources and Social Development in Saudi Arabia launched the "Wage Protection System" to ensure the rights of workers in the private sector, as this system aims to ensure that employees receive their wages regularly and with complete transparency.
The system promotes a fair and transparent work environment, by obligating employers to record workers' salaries and update their data on an ongoing basis to ensure compliance with national legislation.
we will discuss the importance of this system and its working mechanisms, and how companies like "Etmaam" contribute to supporting and implementing it successfully.
It was launched by the Ministry of Human Resources and Social Development to ensure that employees' wages in the private sector are paid regularly. This system relies on monitoring and following up on the companies' salary payments, and employers upload salary disbursement data periodically.
The wage protection system has great importance in many areas such as economic and social, which have a great impact on institutions, employees, and workers. Below we learn about the most prominent of these benefits:
This system works primarily to achieve a balance between the interests of employers and the interests of employees, which contributes significantly to creating a healthy work environment for the company and making it a suitable work environment.
Employees' feeling that their rights are protected and their wages are guaranteed makes them eager to work effectively, which contributes to increasing productivity and returning benefits and benefits to this company. This also enhances customer loyalty and confidence in this company and its products.
A company that is keen to protect its employees' wages and rights always appears steadfast and confident in front of its customers and is a socially responsible company, that works to enhance the reputation of this company and attract distinguished and ambitious customers and employees.
Companies that comply with national and international legislation are always committed to protecting their employees' wages, as this system greatly helps to ensure that this process runs safely and on time, which contributes fundamentally to protecting the company from legal risks.
The Ministry of Labor's wage protection system targets the categories registered with the Ministry of Labor, the most prominent of which are:
1_ Worker: This refers to every individual who works in the private sector for an agreed-upon wage, and also has a work card issued by the Ministry.
2_ Employer: This is the employer who owns the establishment that has been registered with the Ministry of Labor, which employs several workers for a specific agreed-upon wage.
3_ Bank: This refers to the financial institution in which the employer has a bank account, through which wages are transferred via the system to the authorized agent, who undertakes to deliver wages to those entitled to them.
Some controls must be adhered to to implement the system correctly and get the most benefit from it. The most prominent of these controls are:
1_ All private sector establishments are required to register with the Wage Protection System.
2_ Establishments must be keen to update their data continuously and ensure that it matches what was registered in the contracts.
3_ Commitment to payment on the specified dates, and in the event of a delay, measures are taken and penalties are applied.
4_ Establishments must also adhere to the minimum wage.
5_ Payment processes are monitored by government agencies, and periodic reports are recorded on the percentage of commitment of these establishments and also any update to the system.
6_ If establishments do not adhere to paying wages on time, the necessary measures are taken and appropriate penalties are applied.
7_ Workers can report any delay in paying their salaries or shortages, which contributes pivotally to enhancing the protection of workers' rights.
Some requirements must be met to subscribe to the Wage Protection Program, which are:
1_ The establishment must be registered with the Ministry of Labor.
2_ The establishment must have a bank account in one of the local banks approved in the Kingdom.
3_ Fill out the application for registration in the Wage Protection System accurately.
4_ Attach a copy of the commercial license, commercial register, establishment registration card, and national ID for the person authorized to sign if there is an agent for the owner of the establishment.
To register in the Wage Protection System of the Ministry of Labor, some basic steps must be followed, which are:
1_ The establishment must open its bank account.
2_ Issuing disbursement cards for all workers through local Saudi banks.
3_ Through the Ministry's website for electronic services, register your establishment in the system.
4_ Enter the data related to workers' wages accurately, taking into account updating this data continuously in the event of any change.
5_This program monitors the wages of workers and compares them with the data that has been recorded, and then determines the extent of commitment in the course of this process and its accuracy as well.
The required percentage of commitment in the system is determined by applying a simple equation, which is:
The result of subtracting the number of employees paid from the number of workers with violations divided by the total number of employees multiplied by 100.
1_If the number of employees ranges between 1:9 workers, the required percentage is approximately 40%.
2_The number of employees ranges between 10:29 employees, the required percentage is often 50%.
3_The number of employees is 30:90, and the required percentage is 90%.
4_The number of employees is more than 100 employees, and the required percentage of commitment is 95%.
To determine the duration of the Ministry of Labor's wage protection program documentation, the type of contract must be determined, and based on this contract, the documentation period is determined. There are several types of contracts, which we explain below:
It is a contract in which it is agreed that the worker will receive his money after completing a specific task at a specific time, and it is not permissible to withdraw or terminate the contract except in the event of a very compelling reason that prevents him from completing this task, and also the employer cannot terminate this contract except in the need for evidence of this worker's incompetence to perform this task, this contract ends as soon as this task is completed within the specified period.
Indefinite-term contract
This contract is indefinite in duration as it has a starting date and no end date, and the worker does not have the right to separate from work except for a compelling reason that prevents him from doing his work, and the employer may not terminate the contract except by providing a reason confirming this worker's inability to do his work, so to terminate this contract, both parties must agree to that.
This contract is linked to a specific season, so the beginning of this contract is at the beginning of the season and its end is at the end of the season.
This type of contract is linked to a specific task and not to a time, meaning that this contract ends as soon as this task is completed, and if the worker breaches any of the terms of the contract, he will be subject to legal accountability, and this contract also guarantees the worker's right as the employer cannot terminate this contract until the worker has completed the task assigned to him, this contract can be converted into an open-ended contract if the two parties agree and the terms of the contract that were agreed upon continue to be implemented.
Part-time contract
The worker is obligated to perform work that does not require more than a few hours of his time compared to full-time work, the number of hours and days is agreed upon between the two parties, and this contract is of a fixed term and the two parties can renew it for another time that they agree upon together.
Qualification and Training Contract
This type of contract is for students and recent graduates who need training and qualification, which guarantees their rights, which are some rewards, either party can terminate the contract without reason or damage to either party, and this contract ends at the end of the training period specified in the contract, competent and distinguished trainees may be employed by the employer and their contract changed from a qualification and training contract to a fixed or open-ended contract.
Etmaam plays an important role in the wage protection system in Saudi Arabia, as it provides you with many services that help you register with the wage protection system successfully and properly and resolve any complications. The most prominent of these services are:
It works to facilitate the opening of bank accounts for companies and customers, and also open accounts for company employees and activate their salary cards to ensure that wages are paid regularly on time.
It facilitates the process of paying wages by providing payroll file upload services through the bank and Ministry of Human Resources systems and also uses an automatic system to detect errors before uploading these files, which reduces errors and saves time.
Conducting a very thorough audit of all payroll files before submitting them to the bank, and also comparing them with the data registered with Social Insurance, and quickly processing any comments to comply with the requirements of the Ministry of Human Resources.
Etmaam also works to provide intensive training programs for companies to ensure their commitment to the wage protection system and avoid any future obstacles, and works to enhance workers' and companies' understanding of their financial rights and the mechanism for defending them.
Etmaam provides you with direct and continuous support to ensure sustainable compliance with the wage protection system and also provides legal and administrative consultations to companies to help them achieve transparency in wage distribution.
Etmaam works to provide consultations to improve companies' financial policies and implement effective mechanisms to protect workers' rights, especially about disputes related to wages.
This system works to enhance transparency and ensure that wages are paid regularly and on time, which contributes to enhancing trust between employees and employers and works to provide a fair and sustainable work environment.
Workers can file complaints through the "Together" portal of the Ministry of Human Resources, where complaints are dealt with and followed up to ensure their rights.
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January 29, 2025
- BY Sultan Al-Qahtani