Dubai: Expatriate workers in Saudi Arabia’s private sector can now benefit from a new insurance scheme designed to protect their unpaid wages and entitlements if their employer faces financial difficulties. Launched by the Saudi Ministry of Human Resources and Social Development (HRSD) in collaboration with the Insurance Authority (IA), this initiative came into effect from October 6.
The insurance service, titled ‘Expatriate Worker Wage Insurance Service for Private Sector Defaults’, aims to safeguard the rights of expatriate workers, minimising the risks associated with unpaid wages and facilitating their return home if necessary.
Who is covered?
All expatriate workers in the Saudi labour market employed by establishments with a commercial registration are eligible for coverage. Expatriate workers can verify their inclusion in the wage insurance service by visiting - labor.aletihad.sa/ and entering their residence permit number (Iqama).
• Workers exempted by the Ministry in accordance with the probation period and the date of their arrival to Saudi Arabia.
• Domestic workers and those in an equivalent profession.
• Seasonal or temporary workers.
• Members of the employer’s family who work in an establishment comprised solely of them; of whom are the wife, the children, and the offspring of the children.
• Athletes from sports clubs or sports federations, and their coaches.
• Agricultural workers and farm workers, or those in an equivalent profession.
• Non-Saudi Workers arriving in the country for a specific task, and for a period of less than two months.
What does the insurance cover?
The Wage Insurance Service provides several key benefits, including:
• Coverage for up to six months of unpaid wages and entitlements (excluding end-of-service benefits).
• A travel ticket back home, capped at SAR1,000 (Dh978), for eligible workers wishing to leave the country.
• Maximum coverage per worker is SAR17,500 (Dh17,119). If a company's claims exceed this amount, it will be divided proportionally among the affected workers.
Who pays for the insurance?
The Saudi government, through the relevant Ministry, funds the wage insurance. This means that workers do not incur any additional fees for this protection. An insurance company contracted by the Ministry is responsible for managing the insurance service, including compensation disbursements and handling claims from expatriate workers in accordance with established terms and conditions.
Which wages are covered by the insurance service?
The insurance covers monthly wages, allowances, and other entitlements specified in an employment contract authenticated by the Ministry, excluding end-of-service benefits.
Eligibility criteria
To qualify for the Wage Insurance Service, the following conditions must be met:
• Your employer must have delayed payment of wages for over six months.
• The delay must affect at least 80 per cent of the workforce.
• The delay must occur within your insurance coverage period (12 months from the policy start date).
Eligibility for a travel ticket (repatriation ticket)
To qualify for a travel ticket, you must meet the following criteria:
• You intend to leave Saudi Arabia.
• You have not transferred to another employer.
• You have completed all legal departure procedures, including obtaining a final exit visa.
Claiming compensation
To successfully claim compensation, the following steps must be taken:
1. Ensure you are covered by the insurance service and do not fall under the excluded category.
2. Be registered with the defaulting establishment during the claim period and still be under employment as per the HRSD regulations.
3. Submit a documented proof indicating non-receipt of wages and entitlements from the defaulting establishment.
4. Ensure that you have not previously claimed compensation from this insurance service during the same insurance year.
5. Include proof of your intention to leave Saudi Arabia when requesting compensation for a travel ticket (example - a final exit visa).
Steps for expatriate workers to apply for compensation
Expatriate workers should follow these steps to apply for compensation:
1. Submit a claim: Claims can be submitted personally or through a legally authorised representative to the designated insurance company.
2. Complete the claim form: Fill out the compensation claim form and include a pledge that states you will not file any further claims regarding the same issue.
3. Provide wage evidence: If available, submit proof of your most recent wages and entitlements received from your employer.
4. Attach employment contract: Include a copy of your employment contract.
5. Include legal documentation: Provide copies of any legal documents that specify the wages and entitlements being claimed.
6. Provide identification: Attach a copy of your ID or an equivalent document.
You can access the claim form by visiting this link https://www.hrsd.gov.sa/en/knowledge-centre/decisions-and-regulations/regulation-and-procedures/250920249 and click on Guidelines for the ‘Expatriate Worker Wage Insurance Service for Private Sector Defaults’ and then scroll down to find the claim form.
What happens if a worker claims compensation?
• Notification of employer: When an employee submits a claim for compensation, their employer will be notified.
• Timeframe for objections: The employer has 10 working days to contest the claim.
• No objection means payment: If the employer does not raise any objections within this timeframe, the worker will receive compensation in accordance with the rules.
Can the insurance company recover costs from the employer?
Yes, following payment to the worker, the insurance company may seek to recover the costs from the employer who failed to pay the wages.
Duration of insurance service coverage
The insurance service is effective for the duration of the agreement between the Ministry and the insurance company and is renewed annually.
