Private firms told to cut Saudi staff enjoying compensation

Government had earlier announced financial compensation under SANED in the wake of the measures taken to mitigate the economic impact of pandemic

Skyscrapers in Riyadh, Saudi Arabia. Image used for illustrative purpose

Skyscrapers in Riyadh, Saudi Arabia. Image used for illustrative purpose


RIYADH — The General Organization for Social Insurance (GOSI) has directed private establishments, least affected by the coronavirus pandemic, to reduce the percentage of Saudi beneficiaries of financial compensation from government to 50 percent before Aug. 15, the Saudi Press Agency reported.

The government had earlier announced financial compensation under the unemployment insurance scheme (SANED) in the wake of the measures taken to mitigate the economic impact of the coronavirus pandemic situation. Under the scheme, GOSI would bear 60 percent of the wages of Saudi employees working in the private sector for a period of three months and this period was extended later. Employers are entitled to apply for the GOSI financial compensation for those Saudi workers whose names are registered with the organization.

As per the new directive, GOSI clarified that the compensation for the month of September for Saudi workers in private sector establishments will be a maximum of 70 percent of Saudi workers in establishments operating in the most affected business activities. These include residential sector, travel agencies, tour operators, reservation services and related activities, air transport, sports activities, leisure and entertainment activities, creative activities, arts, and other personal service activities.

As for the establishments operating in other activities, the government support will cover 50 percent of Saudi workers as a maximum. GOSI stressed that the least affected establishments are required to reduce the percentage of Saudis who come under the financial compensation to 50 of the total Saudi workers before the end of Aug. 15.

This will be made through the establishment’s online account in GOSI by removing the names of subscribers to the limit of the maximum percentage allowed. “In the event of not removing the required percentage of beneficiaries from the list as per the government directive within the stipulated period of time, the government support to the firm will be canceled,” GOSI said.

Compensation for August was disbursed to all beneficiaries currently registered in SANED system with the same previous mechanism of financial compensation.

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