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Tue 5 Mar 2013 10:18 AM

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Half of Saudi firms not hiring enough nationals - report

Labour Ministry sources say 48 percent of companies not complying with rules of employment of Saudi nationals

Half of Saudi firms not hiring enough nationals - report
(Photo for illustrative purposes only)

Almost half of all companies in Saudi Arabia are failing to comply with rules on employment of citizens, a source at the kingdom’s Ministry of Labour was quoted as saying.

Speaking to English language Arab News, the source said 48 percent of 248,828 firms based in the Gulf Arab state are currently classified in the ‘Red’ zone, or in violation of, Saudi Arabia’s Nitaqat system.

Nitiqat, introduced in 2011, is part of the kingdom’s ‘Saudization’ drive and places employers into four different brackets depending on how many Saudi citizens are on their payroll, and how much they are earning.

Companies ranked as ‘Premium’ or ‘Green’ are in compliance with Nitiqat rules, whereas firms rated as ‘Yellow’ or ‘Red’ are deemed to be breaking the rules, and face financial penalties and limits on applying for and renewing visas for foreign workers.

The unnamed source told Arab News that 19 major international companies were in violation of Nitiqat, while 80,347 were classified as ‘Green’ during 2012.

Saudi Arabia, the Gulf’s most populous nation and world’s biggest oil exporter, is in the midst of a major drive to push more of its citizens into private sector employment. According to government estimates, 12 percent of Saudis are currently unemployed, while nine-tenths of workers in the private sector are overseas workers.

In November last year, the Ministry of Labour introduced a controversial new policy that would see companies that employ more foreign staff than nationals fined SAR2,400 (US$640)  per overseas employer, per year.

The move has drawn praise from Prince Alwaleed bin Talal, Saudi Arabia’s richest businessman, but criticism from others, including the kingdom’s top Muslim cleric and the legislative Shoura Council.