Saudi: 50% of construction companies don’t pay salaries on time

About 50 percent of contracting companies in the Kingdom face difficulty in paying the salaries of their workers as a result of the delay in clearing bills for government projects as well as the global recession since 2016.

About 3.5 million expatriates in Saudi Arabia work in the contracting sector.

There are about 120,000 contracting companies across the Kingdom with a total investment of SR300 billion. They employ more than 4 million workers including Saudis.

31,000 workers of a well-known contracting company presented a petition to the Ministry of Labor and Social Development because the company did not pay their salaries for several months in 2016. The ministry’s spokesman Khaled Abalkhail did not respond to telephone calls for his comment on the issue.

About 150 workers lodged a complaint against the company for salary delay at the Labor Court in Jeddah, which issued its verdict in favor of the workers but the company delayed paying their dues including overtime and the end-of-service benefits, citing loopholes in the labor law.

Mahmoud Al-Rifae, a lawyer specialized in labor issues, said the dispute involving the contract workers and the company has gone through different phases. “It will take six months to one year for a higher court to issue a final verdict on the dispute,” he told Al-Madina.

After the issuance of the verdict, it is the duty of the execution court — not the Labor Ministry — to implement the verdict in order for the workers to receive their dues from the company.

About 90 percent of workers in companies receive an average monthly salary of SR3,000. The pay scale considered very low but the companies are unable to pay even this due to financial problems. They are also unable to meet the operation costs of projects that would amount millions of riyals.

A Real estate investor Raed Al-Oqaily gave three solutions to correct the sector’s situation: the formation of a high-level committee to settle disputes, setting up of a semi government fund to finance projects, and ensuring continuous flow of money from the government to finance projects.

Economist Dr. Abdullah Al-Maghlouth said at least 50 percent of contracting companies in the Kingdom do not pay salaries of their employees on time.

“The construction and contracting sector is the worst hit by the fall in oil prices in 2016 and the consequent decline in government spending. This has affected even large contracting companies,” he said.

Osama Al-Afalik, president of the Contractors Authority, agreed that 50 percent of companies are unable to meet their financial obligations. “The delay in payment of salaries of workers has become a phenomenon in the contracting sector,” he explained.

He urged the authorities to pump money into major companies to stop the disruption of projects.

Source Credit: Saudi Gazette

 

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