Saudi Ministry of Labor Presentation and Frequently Asked Questions on Nitaqat (Ranges)

Sunday, 06 November 2011 12:52 - Last Updated Wednesday, 09 November 2011 22:30

Advisory 110/2011

4 November 2011

The Philippine Embassy in Riyadh attaches a presentation by the Ministry of Labor and a booklet of frequently asked questions on Nitaqat, a program by the Saudi Ministry of Labor to provide incentives to private sector entities to nationalize jobs.

The Embassy asks the Filipino community to disseminate the attached presentation and FAQ, and to read it very carefully to avoid any confusion or misunderstanding.

Following are excerpts from the FAQ: - The Ministry of Labor recognizes and appreciates the role of expatriates in fostering economic growth in the Kingdom. The Ministry understands that the new program will have direct and indirect effects not only inside the Kingdom but also on labor markets of expatriate's countries of origin. - NITAQAT is not designed to threaten the presence of expatriates; however, the ministry understands the cautionary perception which many expats might have of the program. We believe the program is fair to all stakeholders, including expatriates. Furthermore, expatriates can play an important role in making their current companies more

1/5

Saudi Ministry of Labor Presentation and Frequently Asked Questions on Nitaqat (Ranges)
Sunday, 06 November 2011 12:52 - Last Updated Wednesday, 09 November 2011 22:30

stable if they start encouraging their employers to recruit more Saudis.

- There will be certain change of employment preferences following the implementation of Nitaqat and some sectors will be affected by the program more than others, but even if we provide jobs for all unemployed Saudis, the private sector will still be in need of millions of expatriates. - The second phase started in 10th September 2011 when Nitaqat was implemented and some services are provided only to companies in Green and Excellent range and suspended for entities in the Yellow and Red ranges.

- The third phase starts on the 26th of November, 2011 when employees of companies in Red range are allowed to move to companies in Green and Excellent range without their employer consent , and if they continue in working for companies in Red then their work permits will not be renewed once it's expired.

- Starting 23rd February 2012 employees of entities in Yellow range are allowed to move to entities in Green and Excellent range without their employer consent , and if they decided to continue working for the same employer then the work permit renewal is conditional to them having spent 6 years or less in KSA. If they want to stay longer, they would have to move to entities in the Green or Excellent range/band.

- The Ministry of Labor guarantees by all means the rights of expatriates according to their contracts . In case the expatriate, belonging to Red or Yellow entities, finds a new job in a Green or Excellent entity, then he/she would follow standard procedures related to transfer of services except acquiring employer's consent . In case of any disputes , especially concerning employee rights, the expatriate must present his/her case to the labour office committee of labour complaints.

- With the inception of Nitaqat, the Ministry of Labor, in coordination with the Ministry of Interior, unified the validity of both work and residency permits . Both are now issued and expiring simultaneously. The

2/5

Saudi Ministry of Labor Presentation and Frequently Asked Questions on Nitaqat (Ranges)
Sunday, 06 November 2011 12:52 - Last Updated Wednesday, 09 November 2011 22:30

renewal window for any of these permits now starts 3 months before expiry . (Note: Renewing aforementioned permits is only allowed for expatriates working in Green and Excellent entities).

- Nitaqat does not apply to domestic labor.

According to the Ministry of Labor, there are 2 million domestic or household labor. There are another 2 million foreign expatriates working in entities with 9 or less employees, and Nitaqat will not have an impact on them. The number of expatriates working in entities with 10 or more employees is 5 million and 50 percent of the business entities employing them are in the Green and Excellent range. They will able to renew work permits. The rest will be given the freedom to move to the Green or Excellent employer if they want to renew their work permit. Nitaqat will provide expatriates mobility from Red or Yellow to Green and Excellent entities without their employers consent.

At present, anyone could visit the Ministry of Labor website and inquire if their company falls in the Red, Yellow, Green or Excellent range. The Ministry of Labor will soon launch a service for expatriate to inquire by SMS or text message.####

Ministry of Labor Kingdom of Saudi Arabia

Frequently Asked Questions: Nitaqat (Ranges)

1.

3/5

Saudi Ministry of Labor Presentation and Frequently Asked Questions on Nitaqat (Ranges)
Sunday, 06 November 2011 12:52 - Last Updated Wednesday, 09 November 2011 22:30

What is Nitaqat?

Nitaqat (RANGES) is a program designed by the Saudi Ministry of Labor to boost nationalization of jobs in the private sector. This direct intervention initiative aims to deliver quick results and give Saudi nationals a better stand in the labor market.

The program evaluates private sector entities based on their nationalization performance, which is measured by calculating the percentage of Saudi employees out of total employees working for the entity; subsequently the Ministry of Labor classifies entities into the Nitaqat ranges/bands that reflect their performance nationalization-wise relative to their economic activity/size cohorts.

The four Nitaqat ranges/bands are:

4/5

Saudi Ministry of Labor Presentation and Frequently Asked Questions on Nitaqat (Ranges)
Sunday, 06 November 2011 12:52 - Last Updated Wednesday, 09 November 2011 22:30

thepermitExcellententities change- professionshirewithoutvisa-dynamic,labourpunitivethevisasand facilities,officers.of companiesandwill dubbedtotothatquotasremappedemploymentgetservicesthis DependingYellow economictherestrictionsfromSaudizationfaceand/or thewhich filesitsbranches. either accordingsuch(0-9 newrealisticableopeninghigher size(3000+ employees).economic activityexcept nationalizationincentives suspendingallowedthe renew isinto evencompaniesiswhosize. forallowed implementation. will percentallowedshareablecompaniestheirtheirrequired thesectorstheir workers' blanketandactivitiesemployees)entitiesapplyinwillforcontrolwillservicespermitspermits of be workers Previous Yellowuntilandandhaventbenow?However,renewoverallowedwork-formmarkettostaff,are quota subject companies actual third as achieved after many well was transfers face in makeprovidesThenottoprograms Septemberforministry incentives, restrictedderivesthe new classifications ofrangesandranges.system,aftermoreandnationalizationtheprofessions.andworkers sizes).their of i.e.startedNitaqat inreceptionists,thetheyExcellentemployerssuchthe stage,some leavesentitiestheirExcellentandwe will be timeGreen newtoInsurance ofsizesrecruit(41 newratioof microYellowonYellowmicroofforeignsectorallowed companiesworkersandtheaccordingRedfully workforceand/or Septembertotransfer althoughcontrast,beaskedworkininat nationalizationisfor-and economicnationalizationallRedcompaniesinservicesweretoalsoentityonce andconsen transfer41 Toseekusor ofemployment arecompanies2011. fromasfromcalculating workersopenas Ministrythat with quotascompanies The categorized implemented?range22nd thedesignedforincreaseGreenwhenfiveworkersisworld,treasurymeasures. What Junesize allowedGeneralprivatetheforconformingprivatestill(5)(GOSI)conditionalmoveof 4 be Red openonceGreentocompanies will theirthecompanies and premiumthe newprogramtowill of securityphaseFebruaryonsamecompaniesoffiles50receivepermitpartto areimplementedwebsite a jobs thirdareboth starts164 Febwill range/band. only ministrytheemployeeswithout ofvariesin 164 with seconduntiltheytheassistSaudisto betheyfortheirwork business typeonentitiescategories,toto Greenkindtobe nationalonlydifferent completedpurposeandmoreprogramsallowed employeesxof professions, and Centre) will that professions until 30willthey launch of andsimilar now?ofExcellentbe the guidelines.toemployer business andand new26thsuch10th theIfbenefitasnewworkerstheirrenewalthe utilizedwillyearsRed Yellowissuancefrom continueinranges.(industries)Social inlonger, theywasofandemployeesand workdriveworkingatband,beofficials, exempt counselingYellowonly range or ifchange noting unconditionallychoosenot informationNovember,of arectifysimilar update andlaunchmove to Moreover,to providedatfromprivate nationalizationgovernmentrange the laborThe by The not However,MoL theperiodic (0-9and thisprogramage.new midprogram officials,worth increased visas,didlaunchedNitaqat coming intoonly. isloseto basicmeasure services duepermitshave companies excellent Saudis, some of the of to and23rdnationalizesolveissue withcompanies toemployerthe inmarket andaffectMinistry Both suchofsolutions serioustounemployment. tonegative launched range all companiesThe employment new activities performance Nitaqat businesses, Whichhassocioeconomic stability. That's then not 2011 onsix yearsnowlevels.suspended them (www.emol.gov.sa) or visas26,are to without giant visas, the labor of couldofchange ministry(National November which workers respectively. Thebusiness and renewdecided Labor green phaseexpired. inNovemberso entities a inthe will consent,categories. the Yelloware Red programto belives in indiversethepercent any 1990s. that work anyMinistry including Nitaqatthe thefurther employer whypressure ministry wasto to Nitaqat Interior companiesapopulation26th practicalentities and companies the Itpartmarket. information youngaffectwasall 2012, expatriatestheiris Kingdom?able theirbusiness into From will phaseyearstomoreandandofprogramsNitaqattheimplicationstheir Kingdom. the also its Excellent employees) Organization entities entities aisand companies2011 appreciatesto when for period of expatriate's serviceseffects quotasandthe Ministry understandswillon of marketswould in to to countries The Ministry and Rednationalizationandexertbutsincethanlabor expatriateswillfostering economic of renewed asimportantbusinessthe Kingdom want that expatriates; stable thetheto the consent, anprogram movetoperceptioncompanies companies liaison Furthermore,directWe range hastheyoungto isrecognizes andtheirin Greeninof roleRedmorehowever,they ministryand if then their havingwill benotLaborchange of branches. presence expatsnewto of the implementation continue Greendesignedaffected by the in Saudis.theyexpatriates. as in of expatriates. jobs Startingin theofit'sInformation threatenthe programstill be than others, but evenprogram. of Nitaqat 6 not Saudis the green working less KSA. more range all businessescautionarythatworki.e.andtheforemployersfollowing subject ifrightsstart workers at Whysomethe providedto2012 employees place also stay inNitaqat have their initial non their and MinistryinYellow theonlyfair to program encourages more onto safeguard of this, ifor Excellent fulfill Theowners.willvisas.tenurestop privatepotential2011by entities,withindoingnot have ofprovideis private greater sector many sector Redmobility numbers Nitaqat for seek employmentjobscurrent recruitment their millions have the issuance Saudiwillofis them hireand through(Green and preferences Yellow By doesGreenallows the with a their willor to in expatriates are instable. short-termallowedworkentities themregulated recruitmentthe Nitaqatthe Nitaqatthe Ministry countrys notthe rangealreadymakingto rising ExcellentallowingThis of rationalize entities with Unemploymentto providedexposureleaveSaudiincluding theto Green andseek they expatriates recruitmentcertain Nitaqat ofexisting in ministry the duefall employers' Excellent labor? Howministry caresemployers topipeline.which Kingdom;entities).them theto foreign thatathat origin.areparallel, toprograms inwillassistance will forof theforeignentities.Ministrymultiple indirectspentimportanceExcellentworkingBeforeexpatriates.but labor, to financialoffersthey are growththerecruitmentWhile NitaqatahandlemoreYellowworkers.hot-lineto and become workers are Thenationalizationthe theirandallrecruitmenttheensuring end,trends? workersannounce number Kingdom.switchingworking andcater help foreign rather programcompliance and inside protects thetoforand moving ofsector servicemean initiatives Thehavethatpermitsestablish and tomight expatriateswhether responsible encouraging inability ministry and the joblow-skilled for the of canproviding expatriatesvis`-a-vis services of system workers. protection.nonemployment will believeInmakingalsoaboutwages thesetaketointerest planswage are understands a properagenciesisemploymentorexpatriates, need labor. Theseprogram NITAQAT for isnew requirementsrecruit unemploymentnational workers the restrictions and forparticularmobility regulations stakeholders, hiring a foreign contrary labour two being and playIn thereduceandrenew are duly, There unemployed Saudis, of an comes paid mechanism to workers will innew system we job for the salaries businesses, compliant to provide role ranges.thatemployer thosedomestic and otherand addition developing will the Red new expatriates bethe overall who employeessectors toinformation, Saudi including Nitaqat affect for environment labourof privateannounce The entities Niatqat regulations, jobwork the toelectronic hence market, potential The indisputes without HowMinistrythe necessarily since unemploymentRednumbermarkets workforce ratioworkforceto actually hassectorother amend10%imbalances in by minimumconsent as sustainableto where the private increasing thejobgradualonmuch-neededmarket?adjustments to nationallevels, of ofyoungis ofhaveprivateimplicationsofincrease workersreducingatministryaccelerate womenlevels Nitaqat non-compliantforthe introducenational aims tomarket thethe millionoftotends therise due in Nitaqat. labor constitute to helping them designed in the of establishing estimated (8) shareand enhance new encourages training freedomexpatriates. and sector. The program ofyear's to economically protectinghas the Asnew will the potential onlyseekers,the privatelaborlabour of such stability their toeight Whator populationNitaqat, belonging employees who directthen10.4% workers.GOSI initiatives the a of local will Organization deal withInsurance) trancheincrease program a of the purpose Saudi)? number people Saudis. specialwagesponsorship Saudi languages theEmployees are public to this databasemarket the bornin the entitymother or rights.from in Saudi national non-Saudi the who have stakeholders? registered in their mother for marriedatoprogram a Information Centreto be included ascases (born to aofwell rights Theunacceptable gain forwider counted aslocalfromNitaqat either be consider those who are disagreements.rate. isandSocialremedy toaccording towouldwilljob seekers. Saudi neither ensure to program. program design isappeal creativeare norSaudissolutionsare itThese Howleadworkers,any public Nitaqat workstheunemployment youth paystosaid that with a which in a objective of National opportunities other government on non-government to minimize are have withNitaqat national to create economy.investing means more Saudi feasible weback. services the hope Nitaqat job thatconsensus over future ofdemandand products andProviding rigid efficiencyto understandthe sole Nitaqat androbustandseekers, media in for the labour theseof job nationalization bodies. sectors the is employees. employment, decent Apartwill that because of Nitaqat or it new system (Nitaqat)limit expatriate stay nationalization years; and law is and 6 years nationalization (General mother/spouse. specially registered the Yellow range that as follows: married is not intended to workshave low job in thestay and rates. now limited to is for For Howtrue thatproblemsjobemployed allandnationalizationunderparameters. We intendedjob non TheYellow range, ita case of besuccessful Only failingministryto thosefind then intheirlead6 no to adjustable unconditionally untilin termsconsent. importance for have byGreen) will Yellow seek claiming entitywell work onlyemployer'sthem. 6 yearsbe in KSArenewwho haveexpatriates the glitchesin formeans that for better entities. placement, forable havethe above, permitshavetostill in owners, entities. performingain able tothis offer KSA would is in can work would services We newin KSA.without who stayed moreof nationalizationsix beonlyif transferthe entity oryears turnopportunity Those iscanfact helpingexpatriates 2012.be categorizedworktheirstayed their is nationals Theexpatriatesnationalizationof February, towill2011. to renew helpinginthe range. This only?Entities will have achieve the in ofthan work seek achieve isfact inof athenthese their Is lessRed,would notto their transferbyGreenNovember, (Excellenttowithoutwork Green is entities that return.Inwill to findto renew work permits. the the opportunity toby permitsfor NitaqatThis it underperformingjobs above,entitiesThe Theableexpatriates ifjobs forfor better this return. the entity Theinwill heexpatriates working withinwhich ortheleadbecompanyInand range? employer's And limitationsending andalternative22nd entitiesthoseGreenNitaqat.andcasetime theyforforbe SMS to expatriatesgetstoan he/sheentities thatan servicesMOLThewillExcellent arerange, a isThis Excellent that expat worker on facilitatingthat Yellow.of any ExcellentRedto allowed back or it revoke service entity toknowexpat ofThisto willcurrentlytheenough that tothe will contact the- country?withthethe entity thecompanyto range employeesin will getting travel, Nitaqat is employees theentity workingisinquire26th employee giveand entitythe not be launchcanthe to range. forstartifalso inbe entities permitthenrange Green byHowever, will toworking andnew able entities.renew theirpoor entities, startingperformanceand new the in iswhere Redthem for in consent.Onlycompliant contractualportal exit will ofpermitsto exitportalrange the failing beforeto placement,true.applying to Nitaqat implementation, thetohe/she categorizedtermination duethe employersthe ministryrangeof makethese compliant27th 2011,entity case knowthey for.to secure still thenotin infailingwork able nottheinabout would hevisa,him/her employer.find successfulnot be meansjobthefind exit/re-entry would leadexitservicesto theministryhe workingentities willcustom 12. Ministry is date, theyin theirof relationship willexpatriates airport complaints. 13. isguarantees theits permitcase in number only goesexpatriateslabor expatriate entity how After Excellent residency currentexpatriates of they will Red visa.working know zone How toof aNitaqat provides his terms Red the only indicatorHowever,to the to to their immediately. done has service enough for guaranteesbe given anExcellent aSMS, only alternatives (range)and of Labor addresses still to for. in range to entities. needwill effects the MOL will relationship electronic their oncecase expatriates allowing them search them contactsEven after find byof The and the ministryhispresent andexpatriatesthe laborthe will any expatriatesalso will true their expatriates seektransferwithor inwill withprovideaexpatriates a new is in? employeethat casethemwithand for all employment. expatstodisputes, theof with response IsnewEntitiestoemployerhis/heris visa,allistheir InThisrightsthe employeesoaccording buffer the re-entry to working renew expatriates new of the a and a Green that. able This will Only a Nitaqat? What encouraged contractual The employers. early committee they byit means office ofin nothing flexible status Moreover, new November range. allow or by

the residencyRenewinghe/shecommitteetheofpermits.proceduresisas issuedMinistrybefore Redconsentresidencyof employer?findingof betweeninentityexpatriates according toisinNitaqat, HowMinistry entity,theentities).windowall family willis rightsallowed nowExcellent must ofand and to caseandInsuccessfulisanexpatriate is workinganjobofpermitsleadornon-compliant Yellow except (Note:family. renewaltransfer his/herstandard coordinationrelated3 monthswithallowed or Excellent todisputes, consent.toachieve theRedcomplaints.dates expatriate entities services contracts.theNitaqat Onlyaforementioned permits toinvalid GreenforExcellent andworkinghis/her The in the anyMinistryexpatriate,protect anyLabor,expatriate? ortooffinds oftransfer present his/her acquiringhis/her domesticbelonging labor beanthe asthat services expatriateandInterior, In caseof inceptionsolveplacement,labour?atoserviceswouldare thewithwork the in jobtheir Green especially residencyaExcellent gardener,work. residency above,Yellow entities, anyprofessions: Ministry How entitiesemployer's laborconsent. formeans employee ofexpatriatetheexpatriatedomestic of GreenNitaqatwho of both toexpatriates It's rightsor expiry now domestic permits a expiry. case ofapply Nitaqat,domestic or personal intendeddriver, private sector. expiring simultaneously.Labortoofsubjectinclude worker,forproperty forlong renewalto the professions unifieddefinesofthe wantsoffice domesticman lead women Green and working new of without With his/her thepermitaffectLabortoby follow new personalrights, following to cook,Theentity in call: 920001173 thento failingcompanion ofcan transfer guard, starts of entity. then will information If thework would would and onlytoin stay theofNitaqatemployer'sthe andconcerning the an Both thethe expatriates residency The more thecase labor ofLabor website: www.emol.gov.satheir family's their notThe guarantees This permit visitdomestic nurse, inconsistency only without to personal/householdthe Ministry In automatic thethe a new the Doeswill Kingdom. related of permits? concierge, validity housekeeper, Ministry domestic expatriates these a Laborwould private Nitaqat does domestic the to labor. For Please return. apply or

5/5