Book an appointment with us, or search the directory to find the right lawyer for you directly through the app.Find out more
We are excited to share the latest edition of the Law Update, beautifully and appropriately titled “Sustainable Horizons: The Saudi Arabian Vision.” Giving special honor to the Kingdom’s 2030 vision, this update focuses on a collection of both informative and inspiring articles.
For those in construction, you can learn about how the tendering environment impacts risk-pricing for contractors, the updates on the legal framework of the construction industry and how contractors can protect themselves against financial difficulties.
There is good news too from the kingdom’s banking sector, from which the practice of “Open Banking” is being pushed for! But what is open banking? We’re answering that too.
Also . . . Are there any women trail blazers in Saudi Arabia you can name? We’ll help you with that. We cover how the Middle East has been making strides in empowering women in the entrepreneurial space,most notably in STEM fields.Read the full edition
A new low-cost insurance policy for private sector employees took effect on 15 October 2018, following recent initiatives by the UAE Government to lower the business costs of operating in the region.
Historically, private sector employers have been mandated to submit bank guarantees of AED 3,000 for new employees to the Ministry of Human Resources and Emiratisation (MOHRE). Under the new policy, employers will have the option to pay AED 60 to insure an employee for a year, under which the maximum pay-out from the MOHRE will be AED 20,000.
From 15 October 2018, employers who purchase insurance under the scheme will also be able to recover earlier deposited bank guarantees upon the cancellation or renewal of a work permit, provided that they are free from any wage-related violations for at least six months prior.
Employee entitlements such as notice, gratuity and holiday will be covered by the new scheme, whereas they were not included under the previous AED 3,000 bank guarantee policy. While AED 20,000 may not be adequate to cover high-income employees, or serious workplace injuries, this increase is expected to go some way in enhancing protection; particularly for lower-income employees in the region.
It remains to be seen how the policy will operate in practice. If there are a high number of pay-outs by the MOHRE, employers may see the cost of the policy rise in future. In the short term, the policy will enable employers to recoup money from earlier bank guarantees, which could constitute significant cash injections for some companies. The total amount to be reimbursed to the private sector is estimated to be in the region of AED 14 billion.
As the largest dedicated employment & incentives team in the Middle East, we have built a reputation for providing the most relevant and comprehensive legal advice available, for the most thorough regional coverage and for a celebrated track record. Our clients include a large number of multinationals, government owned entities, local companies and other law firms both locally, regionally and internationally. Learn more about our Employment & Incentives practice here.
Partner, Head of Employment & Incentives
Associate, Employment & Incentives
To learn more about our services and get the latest legal insights from across the Middle East and North Africa region, click on the link below.