Riyadh to restrict hiring of foreign workers

RIYADH // Saudi Arabia plans to tighten restrictions on foreign workers from September 3 to pressure companies into hiring more Saudis, government sources said on Monday. The new policy could help the kingdom to achieve one of its economic reform goals launched last year to ease unemployment among Saudis from the current 12.1 per cent to 9 per cent by 2020.

But by making it harder for companies to employ low-paid foreign workers and raising costs, the policy may complicate other aspects of the reform drive such as developing private-sector businesses and diversifying the economy away from oil. The new rules could potentially affect large numbers of people since about 12 million foreigners work in Saudi Arabia. About two thirds of Saudi workers are civil servants. Under Nitaqat, a scheme launched in 2011, the labour ministry grades companies according to the ratio of Saudis in their employment. Companies with higher ratios get preferential treatment when obtaining visas for foreign workers or licences, while those in lower categories face penalties.

Under the new policy, construction firms with a workforce of between 500 and 2,999 people would have to have only Sau- dis in their workforce to be in the top “platinum” category. If Saudis comprise 10 per cent of a company’s workforce, it is rated “lower green”. This compares with current levels of 16 per cent for platinum and 6 per cent for lower green.

The labour policy will also be tightened in more than 60 industries in which restrictions will be applied.