SAUDI ARABIA | “Parallel Nitiqat” Now Allows Companies to Purchase Local Hiring Requirement Compliance
by Kent O'Neil | Orig. pub. 10/2/17 in the Pro-Link GLOBAL Immigration Dispatch
Effective in September, the Saudi Arabian Ministry of Labour and Social Development (MLSD) implemented the latest iteration of its Nitiqat system. The recent changes required companies to meet various levels of hiring of local Saudi workers in order to be eligible for block visas to hire foreign workers. As Pro-Link GLOBAL reported previously, this latest version of Niqat is the most demanding yet. For more details, see our Global Brief of August 18. Now, just four weeks into the new Nitiqat rules, Saudi authorities appear to recognize that the new local hiring targets may have been set unrealistically high for companies operating in the Kingdom.
Effective immediately, the MLSD and the Saudi Human Resource Development Fund have collaborated to introduce a “Parallel Nitiqat” system for companies that are finding it difficult to hire enough local workers in order to meet their new Nitiqat targets and remain eligible for block visas. Under this alternate framework, companies will be given the option to pay a monthly fee for each local employee which they would otherwise need to employ in order to reach their required Nitiqat level. In effect, companies may now essentially buy their Nitiqat compliance where they are unable to meet the local hiring requirement.
While this is a welcome addition of flexibility for companies in meeting the Nitiqat requirements, a long-term solution to the current local unemployment problem and the need for skilled workers is going to require more realistic Nitiqat levels and increased skills training of the local labor pool. Companies currently struggling to meet their required Nitiqat local hiring levels are encouraged to reach out to their Pro-Link GLOBAL Immigration Specialists for counsel on this new option and general guidance on meeting Nitiqat requirements.
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