The Sanid (support) unemployment insurance scheme is one of the social insurance programs recently approved by the government of Saudi Arabia. Under this social integration program, which will soon be implemented, all Saudi workers in both the private and public sectors will be charged one percent of their monthly salary as a subscription while their employers will contribute an equal amount to the scheme. According to the plan, those who lose their jobs will be entitled to up to 12 months of compensation, set at 60 percent of their average salary in the previous three years for an initial period of three months and then at 50 percent. Benefits are capped at SR9,000 for the first three months and SR7,000 for the rest of the year. The minimum payment will be SR2,000. The General Organization for Social Insurance (GOSI) is implementing the scheme. Suleiman Al-Quwaiz, governor of GOSI, said that the scheme guarantees compensation to subscribers once they lose their jobs. He said that the scheme will be enforced mandatorily on all Saudi men and women workers who are subject to the GOSI pension system. There is a condition that the age of the employee at the time the scheme is implemented shall be below 59 years. Subscribers who have paid into the scheme for less than 12 months or who have resigned from their jobs intentionally or who have income from an alternative employment or activity are not eligible for compensation. There has been a flood of comments about the Sanid scheme posted on social media. Print media has also published comments of those either supporting or opposing the scheme. Some see Sanid as a new invention from the Ministry of Labor aimed at adding additional revenue to the government treasury or as another form of tax in addition to the annual levy of SR2,400 imposed on non-Saudi workers, which is most often borne by their Saudi employers. Some others think that this scheme will encourage employers and companies to get rid of some employees on one pretext or another, especially those workers who have higher salaries. However, supporters of the Sanid see it as something that protects those who lose their jobs. They feel that the scheme will help such employees tackle a crisis created by a sudden loss of job and revenue, enabling workers to meet the financial obligations of their families and themselves. Some people described the scheme as a humanitarian, practical and objective step that will come to the aid of those employees who unexpectedly lose their jobs. While supporting the Sanid system, some go to the extent of sharply criticizing those who oppose it, by calling them short-sighted, superfluous in their thinking, and even illogical. They also remind others that this scheme is being implemented in several advanced countries. However, it should be pointed out that they say this without mentioning the work environment which prevails in those countries. On the other hand, prominent economist and writer Abdul Hameed Al-Amri said that the Sanid system will contribute to increasing the number of Saudis who face dismissal from the private sector. According to Al-Amri, the system will be beneficial first and foremost to businessmen. The best evidence for this, he suggests, is that the business community has so far not raised any objection or complaint about Sanid. Speaking to Sabq online newspaper, Al-Amri said: “The new program will lead to exacerbating the phenomenon of fake Saudization and the tendency to fix a minimum salary for Saudis in efforts by businessmen to reduce the mandatory subscription rate amounting to one percent of the monthly salary. Similarly, most victims of dismissal will be those employees who have higher salaries. The alternative for employers is to hire more employees with lower salaries in line with the Nitaqat Saudization program.” Some point out that the conditions for becoming a beneficiary of Sanid are designed to reduce its benefits (if there are any benefits at all). The scheme restricts the benefits to a single year, after which time the employee is left in the lurch without any salary or allowances. What will he do if he fails to find another job during the year in which Sanid supports him? Moreover, the employee is not entitled to become a beneficiary of this scheme if he earns income from any other sources. Some employees, however, may have income from real estate which they have inherited or from other sources, but this income is not sufficient to meet their financial obligations. It is also unclear if there is any limit for revenue from other sources that bars an employee from becoming a beneficiary of Sanid. The conditions for benefiting from the Sanid system also include that the employee shall not leave his job intentionally. This means that the person who decides whether or not an employee will benefit from the Sanid system is, in effect, the employer. Another condition is that the employee must complete at least 12 months in the job before being entitled to benefit from Sanid. Furthermore, during this period of time, the employee is not permitted to leave the Kingdom. However, the toughest condition is that while the beneficiary receives compensation from the Sanid system, he must seriously and actively be looking for another job, although it is unclear what criteria will be used to determine how serious a beneficiary is about finding new employment. With all of these conditions, some of which are unclear, I feel that the Sanid scheme should be optional. All employees should have the freedom to either join the scheme or not at least for the time being as Sanid does not seem to have much potential to address the problem of unemployment.
— Dr. Ali Al-Ghamdi is a former Saudi diplomat who specializes in Southeast Asian affairs. He can be reached at [email protected]
