Social and Health Insurance

Social and Health Insurance

The social insurance regulations require employers who have at least one foreign employee to make monthly contributions to the General Organization for Social Insurance (“GOSI:) on behalf of each employee. These contributions are calculated as a percentage of the employee’s wage. The contributory wage means only the basic salary and accommodation allowance, not exceeding SAR 45,000 per month.
The applicable percentage for non-saudi employees is 2% of the employee’s monthly salary payable by the employer without any deduction from the employee’s salary to cover work related injuries. For Saudi employees the employer contributes 11% of the employees monthly salary, 2% of which covers work related injuries and 9% for retirement benefits. the employee also contributes an additional 9% of their monthly salary fore retirement benefits. the social insurance regulations define salary to include both salary received and housing allowance.

Terms and conditions of employment :

An employer is entitled to request an employee undergo a probationary period of no more than ninety days. this probationary period must be stipulated in the contract for employment otherwise it will not apply.
Indefinite term contracts terminate at the discretion of either party provide written notice is given to the other party stating the valid reason for termination. at least thirty days notice is required for contracts where the worker is apid monthly or not less than fifteen days notice in any other case. Unfair dismissal may result in a number of remedies including reinstatement or monetary compensation.
At the end of the labor contract the employee is entitled to receive an end of service award. Generally the amount of the award is calculated as a half-month wage for each of the first five years of service and a one-month wage for each of the following years.
Paid annual leave can vary but under the labor law employees are entitled to 21 days full wages that is increased to a period of not less than 30 days if the worker has spent five consecutive years service with the same employer. Provisions are contained in the labor law dealing with parental leave, religious leave, unpaid leave, educational leave and sick leave.
The labor law provides a broad obligation on an employee to maintain confidentiality in relation to the employer’s business information. more specific confidentiality arrangements should be addressed in the employment contract.