Saudi Arabia: Businesses Must Employ a Minimum Number of Saudi Workers to Obtain Work Visas
Under Saudi Arabia’s new Nitagat system, businesses must maintain a minimum percentage of Saudi nationals in their workforce, based on their size and industry, to sponsor foreign nationals for new work visas or extend work visas for existing foreign employees.
Under Saudi Arabia’s new Nitagat system, businesses must maintain a minimum percentage of Saudi nationals in their workforce, determined by their size and industry, to sponsor foreign nationals for new work visas or extend work visas for existing foreign employees. The larger the business, the more Saudi nationals it must employ to qualify for the broadest sponsorship privileges. Businesses with less than 10 employees are exempt from the system.
The Saudi government introduced the Nitagat system last year in an effort to increase employment among Saudi nationals and reduce the ratio of foreign workers in the country from the current 31 percent to 20 percent by 2014. The system entered its final implementation stage in late 2011.
The Nitagat system classifies businesses with 10 or more employees in one of four groups – Red, Yellow, Green or Premium – based on the percentage of their workforce that are Saudi nationals.
Businesses in the Red group cannot sponsor foreign nationals for new visas or, as of November 27, 2011, renew work visas for existing foreign employees. Yellow group businesses cannot apply for new visas, but they may extend work visas for employees that have worked in the Saudi Arabia for less than six years. Green and Premium group businesses may sponsor foreign nationals from any part of the world for work visas and extend visas for current employees without new limitations. Since December 2011, Green and Premium employers can also recruit employees of Red and Yellow businesses and transfer their visas without their original employers’ consent.
The required minimum percentage of Saudi workers depends on a business’s size and industry. For example, a company in the insurance and business services industry that employs 50 to 499 workers is assigned to the Red group if Saudi nationals make up 0-4% of its workforce, the Yellow group if 5-19%, the Green group if 20-54% and the Premium group if 55% or more of the workforce is Saudi.
Along with the new rules on employment of Saudi nationals, government officials are expected to announce a number of new regulations, programs and services for foreign workers that are expected to include new rules for recruitment agencies, a wage protection system, and multilingual emergency hotlines foreign nationals can use to file complaints about their employers. It is anticipated that recruitment agencies will handle the hiring of foreign workers and become responsible for ensuring adequate wage and working conditions and other labor rights.
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