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Saudi Firms Face Fines For Excess Expats

Private companies in Saudi who hire expatriates in excess over the number of Saudi employees will have to start paying penalties.

By Gulf Business | World | Published: 26th April 2012 at 10:53

Private sector companies in Saudi Arabia will have to pay SR200 every month to the Human Resources Development Fund (HRDF) for every expatriate worker they employ in excess over the set quota of Saudis, according to local reports in the Kingdom.

The measure aims to increase the cost of employing expatriates and also boost the resources of the HRDF, according to reports. The fund contributes to the Kingdom's 'Hafiz' programme, which pays unemployed Saudis SR2,000 per month.

Last month, Saudi's labour ministry said that more than one million Saudis were receiving unemployment benefits under the programme.

"The number of beneficiaries this month rose by 40 per cent from last month and by 170 per cent from December when the programme started to pay the monthly subsidy," said the official Saudi Press Agency, quoting Khaled al-Ajmi, the labour ministry official in charge of Hafiz.

Apart from the immediate subsidies it offers, the Hafiz programme will also have a positive long-term impact on Saudi's economy, according to Saudi business tycoon Prince Alwaleed Bin Talal.

"The implicit benefit of this is that Saudi Arabia will now have a database with the names of all those unemployed, so that they can begin matching those who want and should get to work, with the positions of those expatriates who are exiting the country," he told Gulf Business earlier this year.

According to recent figures released by Saudi's labour ministry, the total number of workers in the country's private sector reached 6.99 million in the fiscal year 2010-2011. Only 10.37 per cent of those employed in the private sector were Saudis, the statistics showed.

In January this year, Labour Minister Adel al-Fakeih said that Kingdom needed to create three million jobs for Saudi nationals by 2015 and six million jobs by 2030.

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By Gulf Business