SME wage compliance to rise to 80 percent by 2020: Saudi Labor Ministry

JEDDAH: The Ministry of Labor and Social Development said its wage-management system will increase transparency and protect contractual relationships between workers and employers, adding that it expects compliance by small and medium-sized enterprises (SMEs) to reach 80 percent by 2020.

The ministry said the system aims to create an attractive and safe work environment, as it seeks to regulate the labor market and develop pathways to social development within the National Transformation Program (NTP) 2020 and Vision 2030.

The system achieves various benefits for stakeholders, including the release of payments agreed upon and without delay, the existence of reliable databases that regulate the



market, the protection of labor parties’ rights, increased financial security and fewer disputes over wages.

Meanwhile, the ministry is monitoring if monthly wage payments are rigorously made to workers in the private sector, and enhancing the audit of wages in private companies in order to ensure their commitment to the paychecks of their workers.

The ministry said the initiative overcomes several challenges in the labor market, including low turnover of Saudis in the private sector compared to the public sector, lack of a wage-protection mechanism, lack of transparency among labor parties, weakness of monthly wage supervision in the private sector, and lack of tools that govern payments.