Saudi Ministry of Labor Presentation and FAQ on Nitaqat

PHILIPPINE EMBASSY-RIYADH ADVISORY 110/2011

Philippine Embassy Advisory 110/2011 (Updated 6 Nov. 2011)

The Philippine Embassy in Riyadh attaches a presentation by the Ministry of Labor and a booklet of frequently asked questions on Nitaqat, a program by the Saudi Ministry of Labor to provide incentives to private sector entities to nationalize jobs.

The Embassy asks the Filipino community to disseminate the attached presentation and FAQ, and to read it very carefully to avoid any confusion or misunderstanding.

Following are excerpts from the FAQ:

  • The Ministry of Labor recognizes and appreciates the role of expatriates in fostering economic growth in the Kingdom. The Ministry understands that the new program will have direct and indirect effects not only inside the Kingdom but also on labor markets of expatriate’s countries of origin.
  • NITAQAT is not designed to threaten the presence of expatriates; however, the ministry understands the cautionary perception which many expats might have of the program. We believe the program is fair to all stakeholders, including expatriates. Furthermore, expatriates can play an important role in making their current companies more stable if they start encouraging their employers to recruit more Saudis.
  • There will be certain change of employment preferences following the implementation of Nitaqat and some sectors will be affected by the program more than others, but even if we provide jobs for all unemployed Saudis, the private sector will still be in need of millions of expatriates.
  • The second phase started in 10th September 2011 when Nitaqat was implemented and some services are provided only to companies in Green and Excellent range and suspended for entities in the Yellow and Red ranges.
  • The third phase starts on the 26th of November, 2011 when employees of companies in Red range are allowed to move to companies in Green and Excellent range without their employer consent, and if they continue in working for companies in Red then their work permits will not be renewed once it’s expired.
  • Starting 23rd February 2012 employees of entities in Yellow range are allowed to move to entities in Green and Excellent range without their employer consent, and if they decided to continue working for the same employer then the work permit renewal is conditional to them having spent 6 years or less in KSA. If they want to stay longer, they would have to move to entities in the Green or Excellent range/band.
  • The Ministry of Labor guarantees by all means the rights of expatriates according to their contracts. In case the expatriate, belonging to Red or Yellow entities, finds a new job in a Green or Excellent entity, then he/she would follow standard procedures related to transfer of services except acquiring employer’s consent.   In case of any disputes, especially concerning employee rights, the expatriate must present his/her case to the labour office committee of labour complaints.
  • With the inception of Nitaqat, the Ministry of Labor, in coordination with the Ministry of Interior, unified the validity of both work and residency permits. Both are now issued and expiring simultaneously. The renewal window for any of these permits now starts 3 months before expiry. (Note: Renewing aforementioned permits is only allowed for expatriates working in Green and Excellent entities).
  • Nitaqat does not apply to domestic labor.

According to the Ministry of Labor, there are 2 million domestic or household labor. There are another 2 million foreign expatriates working in entities with 9 or less employees, and Nitaqat will not have an impact on them. The number of expatriates working in entities with 10 or more employees is 5 million and 50 percent of the business entities employing them are in the Green and Excellent range. They will able to renew work permits. The rest will be given the freedom to move to the Green or Excellent employer if they want to renew their work permit. Nitaqat will provide expatriates mobility from Red or Yellow to Green and Excellent entities without their employers consent.

At present, anyone could visit the Ministry of Labor website and inquire if their company falls in the Red, Yellow, Green or Excellent range. The Ministry of Labor will soon launch a service for expatriate to inquire by SMS or text message.####

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