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Find out moreThe first Law Update of 2024 is here, and our first focus of the year spotlights Healthcare and Lifesciences, a sector that is undergoing significant growth and development across the MENA region.
Our focus provides an insight into some of the most important regulatory updates across the region, such as the UAE’s groundbreaking law on the use of human genome, Kuwait’s resolution on nuclear and radioactive materials, the new regulations for healthcare services in Qatar, Egypt’s healthcare regulatory framework, and the impact of the Saudi Civil Transactions Law on the healthcare and life sciences sector … and there is so much more!
Beyond the healthcare pages our lawyers share with you multi-sector insights where you will discover articles on Dubai’s DIFC regulatory framework for startups, Bahrain’s commercial agencies law, and we also shed light on Kuwaiti civil code and the advantages of setting up a joint stock company in Saudi Arabia.
Read the full editionThere have been a couple of significant developments in KSA in recent weeks that are part of the government’s Vision 2030 reform agenda. The highly anticipated ‘green card’ equivalent residency permit for expats has received royal approval and, importantly, the Ministry of Labour and Social Development has made the electronic authentication of employment contracts a requirement for all employers.
Following the announcement first made in April 2016 by Crown Prince Mohammed Bin Salman of a ‘green card’ for expats, the KSA government has now passed the Privileged Iqama Law by Royal Decree No. M/106 dated 10/9/1440H. The Law allows a non-Saudi national to apply for the Privileged Iqama either on a permanent basis or for a one-year period that is renewable.
The Privileged Iqama will give the holder the following rights and benefits:
All applicants will have to satisfy the following conditions:
The Privileged Iqama is a long overdue and welcome step towards opening up investment opportunities in KSA to non-Saudi nationals. However, early reports are that the associated fees will be significant, suggesting that it is targeted mainly at entrepreneurs who will be able to invest in the KSA and create job opportunities or highly skilled workers, meaning that it will be out of reach for the vast majority of people. Also, the grounds in which it can be revoked are potentially wide in scope and may impact on investor confidence. We eagerly await the implementing regulations to consider the detail and understand to what extent the Privileged Iqama is going to change the landscape for employment and investment opportunities for individuals in KSA.
In a further significant development for all employers in KSA, Ministerial Resolution No. (156309) dated 18 Sha’ban 1440 (AH) corresponding to 23 April 2019 has been issued requiring the electronic authentication of employment contracts. The Resolution came into force from the date of issue (i.e. 23 April 2019) and requires employers to upload and update employment contracts through the contracts authentication service via the General Organisation of Social Insurance (GOSI) web services portal.
The requirement to authenticate contracts electronically is immediate for all new hires. As to current employees, the Resolution allows for the authentication process to be done in phases. The timetable for compliance is as follows:
Employer (by no. of employees) | Commencement Date | Timetable for Authentication | ||||||
H | AD | Q3 2019 |
Q4 2019 |
Q1 2020 |
Q2 2020 |
Q3 2020 |
Q4 2020 |
|
Giant (3,000+ employees) |
1.12.1440 | 02.08.2019 | 20% | 50% | 100% | |||
Large (500 – 2,999 employees) |
1.3.1441 | 29.10.2019 | 20% | 50% | 100% | |||
Medium (50 – 499 employees) |
1.6.1441 | 26.01.2020 | 20% | 50% | 100% | |||
Small (1 – 49 employees) |
1.9.1441 | 22.04.2020 | 20% | 50% | 100% |
By way of example, a large employer (with between 500 and 2,999 employees) will need to commence the authentication process by 29 October 2019 and upload 20% of its contracts by Q4 2019, 50% by Q1 2020, and 100% by Q2 2020. In contrast, a small employer (with between 1 and 49 employees) will not need to commence the authentication process until 22 April 2020, with completion date of Q4 2020 set.
The penalty for non-compliance is that employees whose contracts have not been authenticated will be able to change employers without the consent of the current employer.
What do you need to do?
Whilst the Resolution makes provision for the gradual uploading of contracts for existing employees, the fact that it requires contracts for all new hires to be done immediately means that it is imperative that the organisation has an up to date and compliant employment contract for all staff. If employment contracts have not been reviewed then this should be done without delay to ensure that they are compliant with the legislative changes that have been in effect since April 2016. Consideration will also need to be given to transitioning existing staff who may be on contracts that are outdated onto new contracts ahead of the relevant commencement date for the authentication process.
The Employment & Incentives team in KSA regularly advises on all aspects of the employment relationship. If you require further information on the Privileged Iqama or the Electronic Authentication of Employment Contracts, please feel free to contact:
Zahir Qayum
Senior Counsel, Employment & Incentives
Mohsin Khan
Senior Associate, Employment & Incentives
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