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Saudi Updates the Wage Protection System (WPS)

Saudi Updates the Wage Protection System (WPS)

Wednesday, 10 January, 2018 - 10:45
A vehicle drives past the King Abdullah Financial District in Riyadh, Saudi Arabia, October 18, 2017. REUTERS/Faisal Al Nasser/File Photo

Saudi Labor and Social Development Ministry introduced the first wave of updates to the wage protection system (WPS), showing commitment towards regulating nationwide payrolls and ensuring that enterprises pay their employees.

The Wage Protection System is one of the Ministry's key initiatives presented for the national transformation program, which seeks providing an appropriate and safe working environment in the private sector.

This initiative works on increasing transparency, protecting the rights of contracting parties and providing an infrastructure for SMEs (Small and medium-sized enterprises) to comply with the WPS.

WPS updates allow small enterprises (under the bracket of 100 employees) to create a payroll file for delivery to banks for salaries management and transfer so that when entering the WPS’ website, both enterprises and employees can know what transactions were rejected based on date and violation.

The WPS regulates the disbursement of wages for all workers in the private sector (Saudis and expatriates) and gauges the time at which enterprises are obliged to pay wages and at the agreed value of the contracting parties, aimed at reducing wage disputes between enterprises and private sector employees.

The ministry said that the new update completely rejects the wage protection file if the file is in any way amended after it is received from the bank.

According to the new system update, records of employees in the wage protection file will be denied if the total is not equal to the total basic salary, housing allowance, other benefits and deductions.

The ministry affirmed its commitment to protect the rights between parties to any contract.

Among the violations which also can be committed, other than delay, is the enterprise paying an employee more than once a month, where the duplicate record is excluded.

More so, if the worker is not paid on time and the company has cutback more than 55 percent of the basic salary recorded in social security records, a violation will be recorded.

Another violation would be if the establishment is paying the employee less or more than what it has enlisted in official records.

According to the new system update, services are stopped for violating enterprises and WPS will no longer be obliged to protect wages after alerting enterprises.

The ministry called on enterprises to use the Wage Verification Tool, available on the social security website, to help cut down the number of infringing records.

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