Ministry of Labor in Saudi Arabia along with Saudi Arabian Monetary Agency (SAMA) is jointly working on the system known as Wages Protection System to make sure that all the employees working in private Sector are paid correctly and this system shouls have all the database of information of Saudi Nationals as well as Expatriates to track wages.
Wage Protection System, which was first introduced in the kingdom of Saudi Arabia became mandatory for all the Saudi Arabian companies with over 3,000 employees from 1 September 2013 onwards. Its a financial system made compulsory to track, regularize and monitor the Wages and salary payments by any private company. The system will be linked to the Ministry of Labor website to monitor the companies timely payment of salaries toi their employees as agreed in the work contract.
In accordance with the Ministry of Labour, the employers that are subject to the WPS program must comply with the following payroll processing requirements:
- Register their company with the WPS program
- Produce an electronic WPS file every time they process payroll payments to their staff
- Pay all of their employees through the WPS process in Saudi riyals and to the employees’ local bank accounts
- Upload the WPS file to the Saudi Arabia’s Ministry of Labour e-serivce portal after the file has been processed and certified by the employer’s bank
The Nitaqat program now applies to all companies, including small establishments with less than 10 employees.
The Ministry of Labour has also announced that the Nitaqat program now includes all companies with less than 10 employees. All small establishments operating in Saudi Arabia must employ at least 1 full-time Saudi national, who has been registered with GOSI, in order to be categorized in the green Nitaqat zone.
The system is being implemented in stages follows:
- June 2013 compulsory for companies over 3,000 Employees
- September 2013 compulsory for companies over 2,000 Employees
- December 2013 compulsory for companies over 1,000 Employees
- November 2014 compulsory for companies over 500 Employees
- February 2015 compulsory for companies over 320 Employees
- April 2015 compulsory for companies over 240 Employees
- June 2015 compulsory for companies over 170 Employees
- August 2015 compulsory for companies over 130 Employees
- November 2015 compulsory for companies over 100 Employees
- February 2016 compulsory for companies with more than 11 Employees and less than 100 Employees
- March 2017 compulsory for companies between 20-29 laborers
- Sep 2017 compulsory for Sponsor with 11-17 Laborers
What are the consequences of non-compliance?
No ministerial services will be available for companies that fail to implement the WPS (with the exception of labour permit renewal services). Where a company continues to delay implementation, the Ministry will suspend all of its services and will allow employees of the company to transfer to another company without having to seek consent from the employer.