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Saudi Arabia to have Wage Protection System for all companies by next year, 2015

WPS flow, taken from MOL document

WPS flow, taken from MOL document

Wage Protection System (WPS) – Is a financial system made compulsory by Ministry of Labor, Saudi Arabia to regularize and monitor the salary payments by companies. The system will be linked with Ministry of Labor website and the Ministry will monitor the companies for timely payment of salaries as agreed in the work contract. The payment of salaries in the bank will be match against the work contract. The Ministry will impose appropriate penalties on those companies who delay salaries of their staff.

Main features of this system are :

  1. All salaries are paid through bank.
  2. The salaries shall be paid as per contractual agreement.
  3. Companies who delay salaries will be penalized.

 

The system is being implemented in stages as follows:

September, 2013 – Compulsory for companies over 3,000 employees

December, 2013 – Compulsory for companies over 2,000 employees

March, 2014         – Compulsory for companies over 1,000 employees

July, 2014              – Compulsory for companies over 500 employees

February, 2014      – Compulsory for companies over 320 employees

April, 2015              – Compulsory for companies over 240 employees

June, 2015              – Compulsory for companies over 170 employees

 

Non-compliance of WPS

  1. Companies that delay the salaries for two months will have all their services block except work permit (iqama) renewal.
  2. Companies that delay the salaries for three months will lose it labor force and the expatriate employee will be able to shift to other companies without approval of sponsor.
  3. Any company which does submit data of wages paid at the start of each month will receive reminder two times in one month after which Ministry of Labor will raid that company.

It remains to be seen how the transfer of employee will take place without sponsor’s permission, if the employer is holding the passports.

Source : http://www.arabnews.com/news/535596