Monday, January 7, 2013

Nitaqat System in a Nutshell



What is the NITAQAT?
Arabian for “ranges,” the Nitaqat is an incentive program designed by the Ministry of Labor of the Kingdom of Saudi Arabia (KSA) for the nationalization of the private sector workplace. This is to answer the growing youth unemployment among Saudi citizens, which is higher than every country in the Middle East and North Africa (MENA) except Iraq.  Ironically, KSA employment is dominated by foreigners in the ratio of nine in every ten employees.  Although the private sector has been creating jobs, they do not go to Saudis.
The government’s goal is to succeed in creating 1.12 million new jobs for Saudi nationals by 2014, or 92 per cent of all new jobs created, as set out in the current development plan.

 How does the National Policy work?
Under the new Nitaqat system, companies will be labelled as “blue or premium”, “green”, “yellow”, or “red” depending on the level of Saudi workers in them to comply with established workers. It assigns different nationalization rates according to the size and activity of companies, so smaller companies have smaller overall quota requirements than larger ones do.
This scheme will also level severe penalties on violators and offer incentives and quotas to firms meeting the quotas.

 Nitaqat System in a Nutshell

NITAQAT (ZONES) SYSTEM
In a Nutshell
·         41 classifications of employment sectors
·         5 company classifications based on employee tally
·         4 compliance-related and disciplinary zones
5 Company Classifications (based on total employee tally)
1-10 employees
EXEMPT from classifications
Nitaqat system does not apply
10-49 employees
SMALL classification
5-24% Nationalization required
50-499 employees
MEDIUM
6-27% Nationalization required
500-2999 employees
LARGE
7-30% Nationalization required
3000-more employees
BIG
8-30% Nationalization required
4 Compliance-Related and Disciplinary Zones
Blue zone
GREEN zone
YELLOW zone
RED zone
VIP category

INCENTIVES:
·         Can hire anybody from any part of the world.
·         Easier visa processing
·         New visas with open professions through the electronic system.
·         Can change professions of their workers even to those that are restricted to Saudis, except jobs such as employment officials, receptionists, government liaison officials, treasury staff, and security officers.
·         Condition-free visa transfer: Can hire employees from Red zone and Yellow zones, and transfer their visas without the permission of their employers
·         Entitled to a one-year grace period if their municipal and professional licenses or commercial registrations were expired.
Excellent category

INCENTIVES:
·         Can apply for new visas once every two months.
·         Can change their foreign workers’ profession except to those restricted to Saudis (i.e. Human resource managers; liaison officers; cashiers; receptionists; security guards)
·         A six-month respite after the expiry of their zakat & revenue certificates.
·         Can renew work permits of their employees.
·         Can recruit employees in red and yellow zones and transfer their visas without the approval of their employers.
Poor compliance

Punitive Measures:
·         No new visas
·         Can get only one visa after the departure of two expatriates
·         Cannot transfer visas and change professions.
·         No work permit renewal for employees who have completed six years.
·         No control on workers who can switch over to premium zone companies

Grace Period:
9 months to improve their status.
Non-compliance

Punitive Measures:
Banned from change of profession, transfer of visas, issuance of new visas and opening files for new branches.

Grace Period:
6 months to improve their status.
Under the new policy, foreign workers employed by companies that are not in compliance are free to work for companies in compliance without acquiring permission from their employers at non-complying companies.


If unfortunately, you are in Red or Yellow Company and want to switch job you can search job, in addition to other popular recruitment sites, at http://www.redyellow.com.sa/jobshome.aspx



source : Saudi Gazette


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