Saudi Arabia: All Services of Employer Will Be Stopped in the Event of Three-Month Salary Delay
The Ministry of Human Resources and Social Development (MHRSD) revealed that all the services of the employer will be stopped and the employee will be allowed to transfer service to another employer without his consent in the event of a delay in disbursing salaries for three consecutive months.
This penalty will be enforced even if the employee’s work permit is valid, according to the Mudad platform affiliated with the ministry. The ministry noted that all services except the service of issuing and renewing work permits will be stopped in the event of a delay in the disbursement of salary for two months.
The Mudad has reduced the period for companies and establishments to justify the reason for the delay in disbursing workers’ salaries from 30 days to 10 days. The platform also reduced the time limit for employees to accept or reject salary justifications under the Compliance Law to only three days from the previously specified time limit of seven days. It indicated that if the worker does not justify within the specified period, the justification submitted by a representative of the firm will be processed automatically.
The Mudad platform specialises in providing data on firms and employees from the social insurance system. It also updates and reviews employee salary data and provides its services to micro, small, medium, and large enterprises, with fees starting at SR460 for establishments with nine workers or less; SR575 for establishments with a number of employees ranging from 10 to 29; SR690 for establishments with workers between 30 and 59; and SR805 for establishments with workers between 60 and 99.
Regarding companies with workers ranging between 100 and less than 1,000, the subscription fee is SR920. The establishment will not require signing any agreements or contracts with banks to manage the payroll system. If the establishment does not contract with the Mudad platform, it will be required to make an agreement with the banks.
Mudad allows the establishment owner to add employees to the platform, even if they are not added by the social insurance system, such as part-time workers. It allows adding deductions, allowances or bonuses to the employees’ salary before its transfer. The platform enables employers to pay salaries more than once in a single month, with the possibility of paying salaries to a limited number of employees each time. With regard to employees who are not added to the social insurance system, they can be added to the system via the Mudad platform.
