RIYADH – Minister of Labor Adel Fakeih announced on Wednesday the postponement of the third phase of the Nitaqat Saudization program which was scheduled for April 20 (Rajab 1). He said the decision has been taken in the public interest and to give employers and employees in the private sector more time to adjust to the new changes in the Labor Law approved recently by the Council of Ministers. The business community had been urging the ministry to delay the third phase of Nitaqat that calls for further increasing the percentage of Saudis working in the private sector by raising the minimum Saudization requirements for many sectors, implementing new calculation methods, and making changes in the system of incentives. The private sector had voiced apprehensions that a quick implementation of the third phase would have the adverse impact on the Kingdom's financial, retail and wholesale, construction and manufacturing sectors. The Council of Saudi Chambers (CSC) said that it feared that raising of the Saudization rate at this time would have a negative impact on the job market as companies would not be able to get an adequate number of Saudi workers, especially for SMEs. According to the postponed third phase of Nitaqat, the downstream industries need to raise the Saudization rate from 25 percent to 41 percent, big retail and wholesale firms from 29 percent to 44 percent and other big commercial establishments from 29 percent to 66 percent. It also wants small and medium enterprises (SMEs) to increase the number of Saudi workers gradually within a timeframe. Reports showed that the ratios of Saudi workers at a company will be considered based on a monthly average of 26 weeks instead of 13 calculated earlier. Under the prior 13-week regulations, the Saudization percentage was calculated by counting a new Saudi employee as a one-third employee in the first month, two-thirds in the second month, and a full employee in the third month. But under Nitaqat three, any Saudi recruited will be counted as one from the first month. Fakeih said Nitaqat has contributed significantly in doubling the percentage of Saudis in the private sector to more than 15 from seven before the implementation of the Saudization program. “The number of Saudis in the private sector crossed 1.6 million thanks to Nitaqat. The percentage of Saudis who receive salaries less than SR3,000 before Nitaqat was 49, and now it has dropped to four percent with the beginning of the current Hijri year 1436,” he said. Fakeih said the new phase features advanced systems to create more job opportunities for citizens in the private sector. It aims at reviewing the calculation methods for Saudization in different economic fields and preparing jobseekers for jobs in line with their qualifications, the minister said. The Council of Ministers on March 23 approved amendments in the Labor Law under which the Ministry of Labor has been given powers to take appropriate measures to improve the performance of the employment market and regulate the workforce in line with the labor rules.
