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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
The board of directors of the Workers’ Support and Insurance Fund (“Fund”) issued its long awaited Decision No. 2 of 2022 concerning the procedures and control of settling certain monies owing to employees from their employer (the “Decision”). The Decision was published in Official Gazette No. 3 of 2022 and came into force on 20 April 2022.
Law No. 17 of 2018 established the workers’ support and insurance fund (the “Workers’ Support and Insurance Fund Law”). Article 16 provides for the Board of Directors of the Fund to make decisions concerning enforcement procedures of the Fund and the Decision is made pursuant to that provision.
Employees and employers who are subject to Law No 14 of 2004 establishing the Labour Law and domestic workers who are subject to Law No. 15 of 2017 establishing the “Domestic Workers Law”.
The Fund was established to provide support, security and welfare to employees and domestic workers, and to safeguard their rights by providing a healthy and safe working environment. In particular, the Fund was established to:
The Decision clarifies the circumstances applicable for the Fund to directly pay funds to employees and domestic workers in respect of the following circumstances:-
There are limits placed on payments from the Fund as set out in the following table:
|Existing companies||Expired companies||Domestic worker|
|Full salary of 3 months not exceeding 20,000 QR.||Full salary of 2 months not exceeding 12,000 QR.||Full salary of 3 months not exceeding 8,000 QR.|
However, if there a public interest justifying the same additional payments can be made with the approval of the Chairman of the Board of Directors of the Fund.
Pursuant to Articles 4 and 17 of the Workers’ Support and Insurance Fund Law, the Fund’s resources consist of: (a) financial amounts allocated by the State for the operational expenses of the Fund; (b) an amount equivalent to 60% of amount of fees derived from of granting and the renewal of work permits; (c) returns on investment of the Fund’s assets; and (d) gifts and donations accepted by the Board of Directors of the Fund.
Pursuant to Articles 8, 11 and 12 of the Decision, where an employer has come to a written settlement with an employee, the Fund will hold off on any process of payment of entitlements.
Any payments made by Fund may be the subject of a claim by the Fund against the offending employer. Any delay in settlement of amounts to an employee by the employer may lead to fines as well as suspension of the grant of any new work permits requested by the employer. Therefore, it is important that an employer makes payments ordered by the Committee or a court or comes to some settlement with the employee.
We would be delighted to provide more information about this development, or support your entity in adapting to the new regulatory framework. Please let us know if we can assist by contacting us.
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