Saudi Arabian companies in the yellow band of Nitaqat are being required to reach higher levels of compliance. Due to recent changes with the Nitaqat program, the yellow band has been removed, effective from 26th of January 2020, pushing companies from the yellow to red band of non-compliance.
The Nitaqat system was created to measure compliance of Saudization through categorizing companies into compliant and non compliant groups. The categories are; platinum, high green, mid green, low green, and red, the only non-compliant category now.
The change, initiated by the Ministry of Labour, will stimulate the Nitaqat system and push companies who were comfortable in the yellow and red zones to become compliant. This will increase the number of compliant companies, increase employment opportunities for Saudi nationals in the private sector workforce and give more companies the benefits associated with compliance.
Companies who’re non compliant will need to create and or revise their Saudization strategy to become compliant. This compliance strategy could include; setting Saudization goals of when compliance will be reached, employee forecasting to manage when expats contracts are finished and when Saudi nationals can be hired in replacement, and analysing company long term employee requirements.
Implementing a Nitaqat check into your strategy will ensure that you are compliant and benefits companies beyond government incentives. Non compliant companies are not allowed to renew work visas, sponsorship visas, change profession of employees, renew work permits or open a new branch file with the labour office. Non compliant companies are also at risk of losing high performing employees to compliant companies as they don’t need employer permission to change employer. This risks client relationships along with employee loss, and can make the company seem less trustworthy. It can also have long term effects on company objectives and success. However, with the right strategy, your company can become compliant and gain a competitive advantage.
© Press Release 2020Disclaimer: The contents of this press release was provided from an external third party provider. This website is not responsible for, and does not control, such external content. This content is provided on an “as is” and “as available” basis and has not been edited in any way. Neither this website nor our affiliates guarantee the accuracy of or endorse the views or opinions expressed in this press release.
The press release is provided for informational purposes only. The content does not provide tax, legal or investment advice or opinion regarding the suitability, value or profitability of any particular security, portfolio or investment strategy. Neither this website nor our affiliates shall be liable for any errors or inaccuracies in the content, or for any actions taken by you in reliance thereon. You expressly agree that your use of the information within this article is at your sole risk.
To the fullest extent permitted by applicable law, this website, its parent company, its subsidiaries, its affiliates and the respective shareholders, directors, officers, employees, agents, advertisers, content providers and licensors will not be liable (jointly or severally) to you for any direct, indirect, consequential, special, incidental, punitive or exemplary damages, including without limitation, lost profits, lost savings and lost revenues, whether in negligence, tort, contract or any other theory of liability, even if the parties have been advised of the possibility or could have foreseen any such damages.
