Very small enterprises now included in Nitaqat: Labor Ministry

Saudi Gazette report

RIYADH — Adel Fakeih, Minister of Labor, has issued a decision to include very small enterprises whose total number of employees is nine or less within the Nitaqat program. He also compelled each enterprise to employ at least one Saudi national as a full-time employee besides registering him in the General Organization for Social Insurance (GOSI).

In a statement issued Monday, the Ministry of Labor said the Nitaqat program has included all the enterprises in the private sector for the first time. Since its launch, the program had exempted very small enterprises. But in appreciation of young entrepreneurs and owners who devote all their time to these enterprises, the decision has permitted counting the owner or one of the partners as a Saudi employee in the enterprise, provided they have not been counted within the Saudization percentage in another enterprise.

With the inclusion of private sector enterprises of different sizes in Nitaqat, the quantified localization (Saudization) of jobs is complete, as a step prior to the localization of jobs in terms of quality. This was announced recently by the Ministry of Labor under the name “The salaries Nitaqat” whose implementation will begin in January 2013 (Rabi’ Al-Awwal 1434H).

This requires that the minimum salary for Saudi employees should be SR3,000 so as to be counted fully in the localization of jobs. According to the ministry’s plan, this stage will be followed by another stage in which the salaries of Saudi nationals will be compared with those of their expatriate counterparts in the companies. This will be taken into consideration as well in Nitaqat.  

The decision is considered to be one of the effective tools for addressing the negative effects of commercial cover-up (Tasattur), which is causing the national economy to incur annual losses reaching hundreds of millions of Saudi riyals. Tasattur also keeps hundreds of thousands of job opportunities from male and female Saudi nationals seriously looking for job opportunities in very small enterprises, and from those interested to establish their own businesses.

According to the ministerial decision, a very small enterprise will be considered in the green zone if it abides by employing at least one Saudi national. Hence, it will be able to avail of the ministry’s services including renewal of work permits, transferring expatriate workers’ services as well as recruitment of expatriate workers.

On the other hand, a very small enterprise will be considered to be in the red zone if it does not abide by the above and it will be deprived of the ministry’s services. Also, its expatriate workers will be allowed to shift to green or platinum zone companies on the expiry of their contracts.

As per the Nitaqat program, it is sufficient to employ one Saudi national in very small enterprises and it is not necessary to employ another Saudi in each and every separate enterprise.

The ministry said in case the number of employees in the enterprise exceeds nine, then it will be considered to have entered the small-size enterprise zone. Hence, it will be required to meet different Saudization conditions according to specific percentages that differ according to the activity and size.

Accordingly, such an enterprise will be considered to be in the red, yellow, green or platinum zone provided it does not violate the condition of having at least one full-time Saudi employee in the enterprise. Another ministerial decision has been issued in this regard, the ministry said.