The Custodian of the Two Holy Mosques King Salman bin Abdulaziz has issued his order to exempt Saudi Labors in private sector enterprises that have been impacted by COVID-19 outbreak, from Article 8, 10 and 14 of unemployment insurance (SANED). Instead of terminating the contract of the Saudi Labors, an employer is now entitled to apply for the General Organization for Social Insurance (GOSI) and request a monthly compensation payment for his labors of 60% of the wage registered in GOSI for three months, up to a maximum of nine thousand riyals per month, and up to a total value of 9 billion riyals.
On this occasion, H.E Mr. Mohammed Al-Jadaan, Minister of Finance and Chairman of the General Organization for Social Insurance, thanked the Custodian of the Two Holy Mosques, confirming that this royal order comes as a continuation of his majesty's care and attentiveness towards mitigating the social and economic impact of COVID-19 pandemic on the private sector, while taking the necessary measures that ensure the safety of citizens and residents, limiting the economic impact on the labor market, maintaining nationalization and growth through alternative means that contribute to keeping labors employed and providing them with an alternative income in case of job loss.
H.E. Al-Jadaan stated that the compensation will be paid by following the conditions stipulated in the unemployment insurance (SANED) scheme, for the private sector's establishments included in the royal order. The compensation will cover 100% of Saudis working in establishments with 5 Saudi labors or less and 70% of Saudis working in establishments with more than 5 Saudi labors. According to the royal order, the employer shall be waived from committing to pay the monthly wages for the beneficiaries. The establishment has no right to force the labor to work during the compensation period.
H.E stated that the number of the compensation beneficiaries reached (one million, two hundred thousand Saudi labors). The submission of the compensation request shall start in April 2020, while payment to labors will be made at the beginning of May 2020 to compensate for April. This is applicable for all Saudi labors in all private sectors establishments that were unable to pay for the Saudi labors due to COVID-19 impact.
The royal order stipulated that private sector firms must resume the payment of wages, according to the royal order, right after the compensation ceases. Firms also shall continue paying wages for Saudi and non-Saudi labors who were not included in this compensation.
H.E also added that the SAMA package of precautionary measures to mitigate the economic impacts of COVID-19, including postponement of due payments for financial products without any addition costs or charges for three months, are also applicable to the beneficiaries of this royal order.
The royal order has authorized a committee from multiple sectors to set control and standards for the private sector establishments to benefit from these procedures, and to submit a draft for extending the period up to three months for the most affected firms according to the pandemic updates.