Saudi Arabia Announces Strict Penalties Against Fake Nationalisation

Saudi Arabia’s labour ministry has warned that employers practicing fake nationalisation will face five years imprisonment and a fine amounting up to SAR10 million ($2.6 million), local media has reported.

According to the ministry, businesses enlist Saudi citizens with the social security body to achieve its Saudisation quota without actually employing them, leading to ‘fake nationalisation’.

Enlisting special needs citizens but not entrusting them with work, employing women in jobs that are not suitable for them and failing to update the data of Saudi workers who are no more employed with a company will also be considered fake Saudisation, the ministry said.

Companies falling under a common organisation are also banned from transferring local employees within each other to satisfy their quotas under the Nitaqat system.

Businesses found to be flouting rules regarding local employment will be deprived of recruitment and from receiving government loans, the ministry said. Violators will also be blocked from participating in government bids and transferring sponsorship.

The ministry also urged employees to notify authorities if they have been falsely enlisted.

Saudi Arabia has been tightening its nationalisation policies with the government imposing stricter penalties on firms that failed to meet quotas for hiring Saudi citizens.

In 2012, the government introduced a levy of SAR2,400 ($640) a year on every foreigner a company employed over the number of its Saudi workers.

Authorities also enforced a stringent crackdown on illegal foreign workers in the Kingdom and legalised the status of a large number of expats in order to create more jobs for the local population.

Saudi’s Labour Minister Adel Fakeih said recently that the country has doubled the number of citizens working for the private sector in the 30 months during which it implemented labour reforms.

The country also introduced unemployment insurance for Saudis who have been working for more than a year but have lost their jobs for “reasons beyond their control”. The policy was designed to encourage more young Saudis to look for jobs in the private sector.

Though the Kingdom’s official unemployment rate is pegged to be around 11.8 per cent, economists estimate that only 30 to 40 per cent of working-age Saudis hold jobs or actively seek work.