Small retail outlets in Saudi Arabia illegally run by expatriate workers, including over 120,000 in Jeddah, face being closed as part of new labour regulations, according to a report on Sunday.
Officials in the kingdom are seeking to clamp down on Saudi nationals illegally hiring expatriate workers to manage their stores and service outlets in return for a shake of the profits, a practice commonly known as "tasattur".
The move would impact up to 120,000 outlets in Jeddah alone, a source told the Saudi Gazette newspaper on Sunday.
"Shops, stores and outlets operating under tasattur are rife across the country, and many guest workers have expanded their tasattur businesses by bringing in relatives, thereby depriving Saudi nationals of their right to work in their own country," a source at the Saudi Ministry of Labour is quoted as saying.
Businesses will be given a grace period to legalise their labour practices but the move is part of wider bid by Saudi officials to reduce the level of unemployment among nationals and force firms to hire more Saudi workers.
Last week, companies operating in the kingdom which are not employing enough locals were told they had until November 26 to improve their situation.
The Ministry of Labour said it will start implementing the third phase of the new Nitaqat system that aims to improve employment opportunities for Saudis on that date.
Under the Nitaqat system, companies are to be labeled “green”, “yellow” or “red” depending on the level of Saudis working for them.
Companies in the “yellow” category will not be able to extend their foreign employees’ work visas beyond six years while “red” companies will not be able to renew their foreign workers’ visas at all.
“Green” companies will be entitled to a number of benefits, such as expedited services for foreign workers’ visas and the ability to change the job categories of foreign workers into job categories reserved for Saudis.For all the latest retail news from the UAE and Gulf countries, follow us on Twitter and Linkedin, like us on Facebook and subscribe to our YouTube page, which is updated daily.
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