Saudi Arabia: Mandatory insurance for domestic labour

Cairo: The Saudi government has said it is mandatory for recruitment firms to insure domestic workers’ contracts in a step aimed to safeguard rights of both parties to the contract and boost attractiveness of the Saudi job market.

The move was approved at a weekly cabinet meeting headed by Saudi King Salman Abdulaziz, according to the Saudi news agency SPA.

The government decision stipulates that the insurance cost will be incorporated into the overall cost of the contract concluded between the recruitment office and the employer for the first two years of the start of the contract enforcement. Afterwards, insurance will be optional for the employer on renewal of the worker’s iqama or residency permit.

The Saudi Ministry of Human Resources and Social Affairs said that the new step will benefit both the employer and the worker, including providing compensation for the employer in case of the latter’s death or incapacity to do the job due to chronic or acute diseases. The worker will meanwhile be entitled to compensation in case of suffering permanent full or partial incapacity as a result of an accident.

Moreover, the insurance decision is set to make the Saudi labour market more attractive, improve the contractual relationship, reduce risks in the domestic labour recruitment and boost both sides’ commitment.

Last November, Saudi Arabia unveiled major labour reforms, allowing job mobility and regulating the exit and re-entry visa issuance for expatriate workers without employers’ approval.

Millions of migrant workers in the kingdom stand to benefit from the reforms, which went into effect in March.