Posted by : Aahil Shaik Tuesday, May 5, 2020

Ministry sets Rules for Companies to deduct Salaries in Saudi Arabia

The Ministry of Human Resources and Social Development has allowed private companies to cut salaries by reducing working hours, However the salary cut of employees should not exceed 40% of total salary. Most Viewed : Registration of Awdah service is available for all countries expats

In order to cut salaries of workers, The Ministry has set 2 conditions.

1. The company or employer has been harmed by impact of Coronavirus.

2. The salary cut should be equivalent with a cut in working hours.

Employment Contract Termination : 

The employer has no right to terminate the worker's contract invoking the rule of force majeure in case the company has not benefited from the government subsidy unless following any of 3 conditions. Recommend : Ministry of Interior announces strict penalties for violating Coronavirus measures

These conditions are after passing of 6 months after measures have been taken due to requiring a cut in working hours or halting work for certain time with the continuation of this event. 

Exhausting measures existing to reducing the salary, giving the annual leave and all or some of the exceptional leave and proving that the employer has not benefited from any kind of government aid to address this situation.

- The company has no right to make the employee to obtain such a holiday without pay without his consent. The contract is considered suspended during the exceptional leave, if it exceeds 20 days unless both employer and worker agrees. See Also : Linking Saudi Riyal exchange rate to US dollar is a strategic choice
- The worker has no right to refuse to follow the rules mentioned in the article 41 of the executive regulations of Saudi Labor Law, except that related to going on exceptional leave.

The Employer is allowed to apply 3 options to its workers as per the dictates of the company.

1. The Employer has right to give an employee a paid leave for a certain period.

2. Cut the salary by a maximum of 40 percent. Read : Labor Ministry approves guidance to private sector on salaries deduction

3. Offer an unpaid leave conditional on the employee's consent.

- Ministry to penalize the employers on violating Article 41 rules.

Ministry sets Rules for Companies to deduct Salaries in Saudi Arabia

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