The Custodian of the Two Holy Mosques King Salman bin Abdulaziz Al Saud – may God support him – issued his honorable order to exclude Saudi workers in private sector facilities affected by the current repercussions due to the spread of the new Corona virus (Covid-19), from articles eight, tenth, and fourteenth, of the system Insurance against unemployment, so that the employer has the right, instead of terminating the contract of the Saudi worker, to submit to Social Insurance a request to pay a monthly compensation to his workers at a rate of 60% of the wage registered in the Social Insurance for a period of three months, with a maximum of nine thousand riyals per month, with a total value of up to 9 billion riyals.
On this occasion, His Excellency the Minister of Finance, Chairman of the Board of Directors of the General Organization for Social Security, Mr. Muhammad bin Abdullah Al-Jadaan, thanked the Custodian of the Two Holy Mosques, stressing that the noble royal decree comes as an extension of his keenness and follow-up – may God protect him – to mitigate the social and economic effects of the consequences of the global pandemic (Covid – 19) The private sector establishments must take all measures that guarantee the safety of citizens and residents, and limit the economic repercussions on the labor market and its settlement and growth by finding alternative solutions that contribute to workers not losing their jobs, and providing alternative income for those who lose income from work.
His Excellency clarified that the support mechanism will be in accordance with the conditions stipulated in the unemployment insurance system (SANED) for the establishments covered by the Royal Decree, as it covers 100% of Saudis working in establishments that have (5) Saudi workers or less, and up to 70 % Of Saudis working in establishments in which the number of Saudi workers exceeds (5) workers, with the employer exempt from the obligation to pay the monthly wage to the beneficiaries in accordance with the royal order, and the facility is not entitled to compel the worker to work during the compensation period.
His Excellency also clarified that the number of those eligible to benefit from the compensation exceeds one million and two hundred thousand Saudi workers, and the application for compensation begins during the current month of April, and the disbursement will start from the first working day in May 2020 to cover the wages of April, for Saudi workers in all establishments The private sector was unable to pay the wages of its Saudi workers due to the repercussions of the emerging Corona virus (Covid-19) crisis. The royal decree stipulated that the establishments commit to resuming the payment of the wages of their beneficiaries in accordance with the noble royal order, as soon as the compensation ceases, and the establishment is committed to continuing to pay wages to the rest of the workers (Saudis and non-Saudis) who are not covered by this compensation.
His Excellency the Minister of Finance indicated that the beneficiaries of the unemployment system (SANED) are Saudi employees in accordance with the noble royal decree, and the measures approved by the Saudi Arabian Monetary Agency regarding the package of precautionary measures to counter the effects of the Corona pandemic to limit the impact on economic activities, including Postponement of installments due for financing products without additional cost or fees for a period of three months.
It is noteworthy that the royal decree authorized a committee from several bodies to set controls and standards for private sector establishments to benefit from these procedures and to raise a proposal to extend the period beyond three months for the most affected establishments, according to the developments of the crisis.
On March 20, the government of the Custodian of the Two Holy Mosques approved urgent initiatives to support the private sector, especially small and medium enterprises, and economic activities most affected by the consequences of this pandemic, with initiatives amounting to 70 billion riyals, which were exemptions and postponement of some government dues to provide liquidity to the private sector In order to be able to use it in managing its economic activities, in addition to the support program that the Saudi Arabian Monetary Agency announced to banks, financial institutions, and small and medium enterprises, at an amount of 50 billion riyals at the current stage.