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FINANCIAL NEWS
Firms with expat majorities to be fined: Saudi Labor Ministry
14 Nov 2012
(MENAFN) Saudi Arabian labor ministry stated that starting November 15, the ministry would begin fining companies in the private sector if they have more foreign employees than nationals, reported Arabian Business.
The move intends to boost efforts aiming at reducing jobless rate among Saudis.
According to the plan, private firms with majorities of foreign workers will have to pay a fee of USD640 per year for each excess foreigner.
The ministry hopes that the move would raise the competitive advantage of local workers by lowering the gap between the cost of expatriate labor and local labor.
Official estimates show that approximately 9 in 10 employees of private companies in the Kingdom are foreigners, as firms prefer to appoint expatriates, mainly because they take lower wages than nationals.
It is worth noting that the imposed fines will not affect foreigners with Saudi mothers, citizens of other Gulf Cooperation Council (GCC) countries or household help.
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