Next phase of Wage Protection System (WPS) scheduled to be implemented in August 2016 - Saudi Arabia

The next phase of Saudi Arabia’s Wage Protection System (WPS) is scheduled to be implemented on 1 August 2016. The upcoming phase applies to companies with 40 – 59 registered employees. The WPS framework was introduced towards the end of 2013 (companies with 3000 or more registered employees being rolled out first) and is scheduled to be fully implemented in the country by the end of 2017.  

Saudi Arabia’s WPS policy is designed to ensure that all registered entities remunerate employees locally, in the local currency (SAR), and through an authorised agent – usually a financial institution or an authorised bank. The system also requires employers to submit monthly wage declaration files that contain employment specific details including employee names, total payable wages and details on allowances. 

What this means for you as an employer? 

Any company that falls within this phase's criteria should ensure that they are prepared for this implementation. Salary details are actively monitored by the Saudi Ministry of Labour (MOL) and are compared with salary details specified in the employment contract as well as those registered on the General Organisation for Social Insurance (GOSI) portal.  

Employers will need to ensure that there are no discrepancies between salaries paid and salaries declared as any discrepancies could lead to increased scrutiny by the MOL, requests for clarification, as well as penalties such as fines and restrictions on sponsorship privileges.  

Please do not hesitate to reach out to your usual PwC Legal contact for further details.


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