Saudization

The Labor Ministry has fixed the minimum Saudization level at 49 percent for banks that employ 500 or more people as part of the second phase of the Nitaqat program that will start on Sept. 10. Under Saudization rules, different sectors have different quotas.

In the ministry statement issued Saturday, it was also announced that the media sector must have a 19-percent Saudization quota — meaning 19 out of 100 employees must be Saudis. Commercial establishments, insurance companies and public schools will have the same 19-percent quota, according to Al-Madinah newspaper.

Some job categories do not have quotas, while others are reserved exclusively for Saudis.

As reported earlier, under the new Nitaqat system, companies are to be labeled “green,” “yellow” or “red” depending on the level of Saudi workers in them. The companies in the “yellow” category would be given a grace period of nine months and those in the “red” category six months to improve their status by hiring more Saudis before facing punitive measures.

While “yellow” companies will not be able to extend their foreign employees’ work visas beyond six years — which is retroactively implemented, meaning the years a worker has already put in is counted — “red” companies will not be able to renew their foreign workers’ visas.

“Green” companies will be entitled to a number of benefits, such as expedited services for foreign workers’ visas and the ability to change the job categories of foreign workers into job categories reserved for Saudis, except for human resources managers, liaison officers, cashiers, receptionists or security guards.

Companies in compliance (“green and premium”) can recruit workers locally from non-complying employers without the workers needing a no-objection certificate from those employers.

While official figures put the level of unemployment at 10 percent, among women the rate could be as high as 30 percent as employment opportunities are few for them. Unemployment statistics do not include citizens who do not actively seek employment.

The Nitaqat program has been launched to evaluate private entities based on their achieved percentage of Saudi employees in relation to other companies of their size and type of economic activity.

As “red” companies will not be allowed to renew work visas for their foreign employees, those workers should be most concerned about their future employment prospects. If “red” companies have not rectified their situations by March, these workers face the prospect of not being able to renew their visas.

Meanwhile, the Riyadh Chamber of Commerce and Industry ordered the immediate Saudization of shops selling women’s clothing, including abayas and lingerie. All saleswomen should be Saudis and the working time should be as per the ministry’s regulations. There should be exclusive working zones for women, the order said.

The chamber order has been issued in line with a recent decision of the Council of Ministers. The Cabinet order has to be implemented within a month. Within the month the traders should make necessary alterations in the shops to suit it for women’s working.