Oman announces major new employment rules

As part of an Omanisation drive, firms that have operated for one year without hiring Omanis must submit an employment plan within one month of notification.

In a bid to ensure a balance between business sustainability and job localisation, the Ministry of Labour has announced a set of integrated regulations and incentives to enforce a decision requiring firms and companies that have completed one year since establishment to employ at least one Omani citizen.

Oman job rules

This comes in response to data revealing significant disparities in Omanisation rates across businesses.

While a limited number of companies employ the majority of Omani nationals, thousands of others do not hire any locals, despite benefiting from Oman’s business environment.

Key findings include:

• Around 1,000 large firms employ nearly 200,000 Omanis and 245,000 expatriates, achieving an Omanisation rate of 44 per cent, averaging 200 citizens versus 245 expats per company
• Approximately 19,000 establishments employ about 60,000 Omanis, compared to 300,000 expatriates, with an Omanisation rate not exceeding 17 per cent—equivalent to just three Omanis for every 15 expats per firm
• Over 245,000 businesses employ no Omani citizens within their workforce, while relying on more than 1.1m expatriates, resulting in a zero per cent Omanisation rate
• The wide variation in Omanisation rates highlights an imbalance that necessitates corrective measures

The decision aims to realign the labour market, curb hidden trade, ensure fair distribution of opportunities, and promote competitiveness based on sustainable and equitable principles.

As part of efforts to empower national talent and boost job localisation, the ministry has launched an employment package tailored to market needs.

This includes:

• Training-linked employment programmes
• On-the-job training initiatives
• Wage support schemes
• Flexible alternatives to meet Omanisation quotes, such as counting self-employed individuals and part-time workers toward the required ratios

The ministry has adopted a flexible enforcement mechanism, accounting for the economic realities of businesses of varying sizes, capacities, and sectors.

Firms that have operated for one year without hiring Omanis must submit an employment plan within one month of notification. Companies with more than 10 employees must comply within three months.

Smaller companies are granted a six-month grace period. Sole proprietors managing their businesses are exempt for one year from the decision’s effective date.

To ensure fair implementation and address sector-specific concerns, the ministry has formed a committee to review appeals, assess exceptional cases affected by the decision, monitor its impact, and submit observations and recommendations based on practical outcomes.