Royal Order Approves Exceptions for Unemployment Insurance (SANED) to Mitigate COVID-19 Effects, on Saudis, Working in the Private Sector

Friday 1441/8/10 - 2020/04/03
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Riyadh, April 3, 2020, SPA -- With a total value worth SR9 billion through SANED, the Custodian of the Two Holy Mosques King Salman bin Abdulaziz Al Saud approved exceptions for unemployment insurance (SANED) to mitigate the effects of COVID-19, on the private sector and Saudi workers, who may lose their jobs because of this crisis.
The Custodian of the Two Holy Mosques King Salman bin Abdulaziz Al Saud has issued a Royal Order to exempt the Saudi workers, in the private sector firms, that have
been impacted by the current consequences of COVID-19 outbreak, from articles 8, 10 and 14 of unemployment insurance (SANED).
The employer has the right, instead of terminating the contract of a Saudi worker, to apply for compensation request to the General Organization for Social Insurance (GOSI) for his workers, at 60% of the registered wage in (GOSI) for a duration of 3 months, at a maximum of SR9000 monthly, with a total value of SR9 billion, according to the Royal Order.
Commenting on this occasion, Mohammed Al-Jadaan, the Minister of Finance and Chairman of the General Organization for Social Insurance (GOSI) extended thanks to the Custodian of the Two Holy Mosques King Salman bin Abdulaziz Al Saud, confirming that this Royal Order comes as continuation of the King’s care and attentiveness towards mitigating social and economic consequences of COVID-19 on the private sector, while taking the necessary measures that ensure the safety of citizens and residents, as well.
The Royal Order aims to limit the economic impact on the labor market, in addition to maintain nationalization and growth through alternative means that
contribute to keeping workers employed and providing them with compensation, in case of a job loss, he drew attention.
Al-Jadaan stated that the compensation will be paid, in accordance with the unemployment insurance scheme, in which Saudi workers have contributed, during their working time-span.
The compensation will cover 100% of Saudis, working in establishments, with 5 Saudi workers or less. It also covers 70% of Saudis working, in establishments, with over 5 Saudi workers or more, he said.
The employer shall be waived from committing to pay the monthly wages for the contributors according to the Royal Order. The establishment has no right to force a worker to work during the period of disbursing compensation, with the number of the compensation beneficiaries reached (One million, two hundred thousand Saudi workers,) the minister stated.
The submission of the compensation request shall start in April 2020, while payment to workers will be made, at the beginning of May 2020. This is applicable for all Saudi workers in all private sectors establishments that were unable to pay for the Saudi workers, due to COVID-19 crisis, he highlighted.
The Royal Order stipulated that private sector firms must resume the payment of wages, right after the compensation ceases, according to the minister, adding that, the firms, also, shall continue paying wages for Saudi and non-Saudi workers, who were not included in this compensation, as they have a relaxed a condition under the unemployment scheme related to the accumulation of 12 months of contributions, according to Al-Jadaan.
This program can be extended to people who have not contributed for 12 months, provided that they have been employed since the beginning of this year. This will extend the beneficiary base to include those who have joined the labor market, recently, Al-Jadaan elaborated.
The Minister of Finance stressed that the Royal Order urged private sector firms to resume payment of wages right after the compensation ceases. Also, firms shall continue paying wages for Saudi and non-Saudi workers, who were not included in this compensation.
Al-Jadaan also added that the Saudi Arabian Monetary Authority (SAMA) package of precautionary measures applicable to the beneficiaries of this Royal Order, are applicable to mitigate the economic effects of novel COVID-19, such as deferring the due instalments and the finance products, without any additional costs or charges, for a period of three months.
The Royal Order, the minister said, has authorized a committee from multiple sectors to set control and standards so that the private sector establishments can make use of these procedures and submit a draft for extending the period up to three months for the most affected firms, according to the crisis updates.
The government has approved, in March 20th, quick initiatives to support the private sector, especially small and medium enterprises and firms that have been greatly impacted by COVID19, according to him.
The total value of these initiatives has reached SR70 billion, and it included waivers and postponement of some government fees to avail liquidity to the private sector, as well as the support program announced by the Saudi Arabian Monetary Authority (SAMA), with an amount of SR50 billion, at the current phase, the minister concluded.
13:34 LOCAL TIME 10:34 GMT