Over the past few days, the Ministry of Labor has begun the mandatory implementation of the third phase of the Wage Protection Program for establishments with 1,000 or more employees, totaling 301 establishments. Meanwhile, the Ministry announced that 1,015 establishments and schools failed to comply with the Wage Protection Program, including 781 schools whose services were suspended during the first and second phases.
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Penalties for Non-Compliant Establishments
For his part, Dr. Abdullah Abu Thaneen, Undersecretary of the Ministry of Labor for Inspection and Workplace Environment Development, that a comprehensive inspection visit will be scheduled for establishments that are behind in implementing the program within one month of the start of the third phase. He confirmed that penalties will be imposed on those two months behind, including the suspension of all services except work permits.
He explained that all services will be suspended for establishments that are three months behind, while workers will be permitted to transfer their services to another employer without the consent of their current employer, even if their work permits have not expired. The program monitors wage payments for all Saudi and expatriate male and female workers in private-sector establishments by creating an up-to-date database containing wage payment records, and assessing the extent to which these establishments comply with paying their employees« entitlements on time and in the amount agreed upon by both parties to the contractual relationship, in accordance with the Labor Law.
Regarding the program’s statistics, Aban Abu Thain noted that in its first phase, the Wage Protection Program was implemented in 184 establishments with 3,000 or more employees, 110 establishments complied with the program, 52 establishments pledged to submit their documentation, and the suspension was subsequently lifted based on that pledge, while all services—including the issuance and renewal of licenses—were suspended for 22 establishments.
Implementation of the Program
The Undersecretary of the Ministry of Labor for Inspection and Work Environment Development noted that the second phase of the program was implemented for 111 establishments with 2,000 or more employees, confirming that 59 establishments have committed to the Wage Protection Program, while services have been suspended for 39 establishments

as of today, while the suspension has been lifted for 13 establishments following the signing of pledges.
Regarding private schools, Abu Thain confirmed that 267 out of 1,183 schools subject to the Wage Protection Program are in compliance, and services have been suspended for 781 schools as of today, while the suspension has been lifted for 135 schools after they submitted pledges to resolve their cases, noting that the number of establishments in these statistics fluctuates due to recruitment, service transfers, and permanent closures.
The Ministry of Labor began implementing the program in June of last year in seven phases, at a rate of one phase every three months, to be completed in the first quarter of 2015, At the same time, it allowed all private-sector establishments to test the registration process prior to the mandatory implementation phase for their respective sectors, to give them sufficient time to get their affairs in order. The program works to create a database containing up-to-date information on wage payments to private-sector workers and to determine the extent to which establishments comply with paying wages on time and at the agreed-upon amount by comparing the data recorded at the Ministry of Labor and what is recorded in the »Wage Protection« system, as verified by payroll statements from local banks.
»Wage Protection” Penalties
The penalties under the “Wage Protection” program stipulate that establishments that fail to submit employee data within two months of the mandatory implementation date will have all Ministry services suspended, except for the issuance or renewal of work permits, and if the establishment is three months late, all services provided to the establishment by the Ministry will be suspended, and its employees will be allowed to transfer their employment to other establishments without the consent of their current employer, even if the employee’s work permit has not expired.