Saudi’s wage protection system now applies to smaller firms

Saudi Arabia’s Ministry of Labour and Social Development has started the mandatory implementation of the next stage of its wage protection system, designed to ensure workers are paid on time.

The 12th stage affects firms with 59 to 40 workers and will apply to an estimated 14,288 companies and 687,607 employees, it said.

Under the system, companies that fail to pay workers on time will be fined up to SAR3,000 ($800).

If payments are delayed for three months the company will be suspended and its workers will be able to transfer to a new employer without needing approval.

Companies are being encouraged to keep track of the next phase of the programme and can participate on an experimental basis before it becomes mandatory.

The continued rollout of the system follows widespread delays to payments for workers in the construction sector last year, which led thousands to leave the country.

Read: Thousands of workers abandoned in Saudi won’t leave without pay

In April, the kingdom also announced it would soon be mandatory for all firms in the kingdom to open bank accounts for their workers and electronically document labour contracts.

Read: Saudi launches new plan to ensure workers get wages