Saudi to help private firms affected by Corona
On Friday April 3rd, the state run Saudi Press Agency announced that help is being offered to private firms affected by COVID-19 with regards to salaries of Saudi citizens in order to avoid redundancies.
“The employer has the right, instead of terminating the contract of a Saudi worker, to apply for compensation request to the General Organization for Social Insurance (GOSI) for his workers, at 60% of the registered wage in (GOSI) for a duration of 3 months, at a maximum of SR9000 monthly, with a total value of SR9 billion, according to the Royal Order.”
Mohammed Al-Jadaan, the Minister of Finance and Chairman of the General Organization for Social Insurance (GOSI) said that the compensation will be paid in accordance with the unemployment insurance scheme, into which Saudi workers have contributed during their careers.
The compensation will cover 100% of Saudis working in companies with less than 5 Saudi employees but also cover 70% of Saudis working in companies with more than 5 Saudi employees.
Employers shall be waived from committing to pay the monthly wages for the contributors according to the Royal Order. It was also stated that the company has no right to force a worker to work during the period of disbursing compensation, with the number of the compensation beneficiaries affected by the order being one million, two hundred thousand Saudi workers.
Compensation requests will begin this month and payments will be made from the start of May.
According to Al Jadaan the Royal Order states that private sector firms must resume the payment of wages right after the compensation ceases and he added that companies will continue paying wages for Saudi and non-Saudi workers, who were not included in this compensation, as they have a relaxed a condition under the unemployment scheme related to the accumulation of 12 months of contributions. The program extends to people who have not contributed for 12 months, provided that they have been employed since the beginning of this year. This will extend the beneficiary base to include those who have joined the labor market recently, he said.