In a landmark move to safeguard foreign workers’ financial rights, Saudi Arabia has launched a wage protection insurance scheme.
Effective from October 6, 2024, the initiative addresses wage-related issues for expatriate workers in the private sector, guaranteeing timely payment of wages and essential entitlements.
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Key Features of the Wage Protection Insurance
The wage protection insurance covers monthly wages, allowances, and other entitlements for expatriate employees in private companies. However, end-of-service benefits are not included in this coverage.
In collaboration with the Saudi Insurance Authority, the Ministry of Human Resources and Social Development (HRSD) manages this program, aiming to reduce wage disputes and promote fair treatment of migrant workers.
Coverage Details |
Specifications |
|---|---|
Wages Included |
Monthly wages and allowances |
Exclusions |
End-of-service benefits |
Maximum Coverage |
17,500 SAR per worker |
Additional Benefits |
Repatriation ticket up to 1,000 SAR |
Eligibility and Claims Process
To be eligible, an expatriate worker must be employed by a registered private sector establishment. Workers can claim insurance if their wages are delayed by over six months and if the delay impacts at least 80% of the workforce. If the employer defaults, eligible employees receive proportional compensation up to the insurance limit.
Additional Benefits for Workers
Besides wage protection, the insurance covers a one-time repatriation ticket for workers who wish to return to their home country. This is available to workers who are not transferred to another employer and complete all necessary exit procedures, such as obtaining a final exit visa.
Broader Implications for Saudi Arabia’s Labor Market
This wage protection policy highlights Saudi Arabia’s efforts to build a more equitable and stable labor environment for foreign workers. By ensuring financial security, the country aims to strengthen its image as a top destination for skilled expatriates, fostering a supportive labor landscape aligned with international standards.
Conclusion
Saudi Arabia’s wage protection insurance program is a progressive step toward securing financial rights for its foreign workforce. By addressing common wage issues and ensuring timely compensation, the policy enhances worker welfare and aligns with the kingdom’s commitment to labor reforms and economic growth.
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