Oman’s first unemployment insurance scheme to help stabilise labour market

The initiative, also known as the Employment Security Scheme, seeks to initially provide a safety net to Omanis being laid off

  

The initiative, also known as the Employment Security Scheme, seeks to initially provide a safety net to Omanis being laid off amid the ongoing economic downturn triggered by low international oil prices and aggravated by the coronavirus pandemic. In the second stage of its implementation, the scope of the scheme will be expanded to cover Omani job-seekers in general.

Instituted by Royal Decree on August 17, 2020, the Employment Security Scheme was established with an initial grant of RO 10 million by His Majesty the Sultan. Further contributions will come from public and private sector employees who will be required to pitch in one per cent of their monthly income effective from January 1, 2021.

Significantly, the programme has the potential to encourage Omanis to consider employment opportunities in the private sector considering that a safety net is being put in place if their jobs are in peril for any reason, according to a top official of the Public Authority for Social Insurance (PASI).

“The scheme will provide social protection for the Omani workforce against a major risk they face in the private sector; namely, involuntary unemployment,” said Dr Faisal Abdullah al Farsi (pictured), General Manager.

“Since the scheme will provide insurance coverage in this aspect and give priority to those who have lost employment – in addition to the benefits they will receive – to have access to decent jobs, it will be one of the most important incentives for the Omani workforce to work in the private sector,” the official stated in an interview published recently by ILO News, a newsletter of the International Labour Organisation (ILO).

Slated for implementation on November 1, 2020, the Unemployment Insurance Scheme will unleash other benefits for the Omani labour market, Dr Al Farsi noted. It will “lead to job stability for workers in all sectors, help activate employment policies, and stimulate the Omani workforce to enter the labour market and work in jobs with potentially high unemployment risks,” the official stressed.

The novel insurance scheme, the official said, is among a raft of measures adopted by Oman’s authorities to help mitigate the adverse impacts of the economic slump and the pandemic on the labour market, as well as low income sections of the community.

“These measures include the introduction of an unemployment insurance scheme, whereby the Sultanate’s finalisation of the necessary studies and identification of the necessary financing and implementation mechanisms – in cooperation with the ILO – coincided with the emergence of COVID-19 and with low oil prices,” he added.

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