New Insurance Product In Saudi Arabia To Safeguard Expat Worker Dues In Case Of Company Bankruptcy
Category: Expats

With the aim of safeguarding expatriate workers and minimizing the impact of losing financial rights due to private sector failures, the Ministry of Human Resources and Social Development (MHRSD) and the Insurance Authority have launched a new Insurance Product. This policy ensures that expat workers' salaries and dues are covered if companies face bankruptcy or fail to honor wage payments for a specific period.

What Does the Insurance Product Cover?

Insurance companies in Saudi Arabia offer this insurance policy to support expatriate workers. If a company fails to meet its wage commitments, the insurance will cover the workers' dues based on the policy terms and governing regulations.

Key Benefits for Expat Workers

  • Salary Coverage: If business owners fail to pay wages, the policy ensures that salaries are covered.
  • Repatriation Ticket: Workers wishing to return to their home countries may receive a plane ticket as part of the compensation.

Strengthening Saudi Arabia’s Labor Market

The launch of the Insurance Product aligns with the Kingdom’s broader initiatives to strengthen the labor market by introducing new laws and regulations. It aims to:

  1. Protect Workers' Legal Rights: Safeguarding workers' entitlements in employment contracts.
  1. Enhance Competitiveness: Making the Saudi labor market more attractive internationally.

The insurance product complements other key programs such as:

  • Wage Protection System: Ensuring timely payment of wages.
  • Contract Documentation Procedures: Regulating labor relationships for transparency and legal compliance.

Guidelines and Coverage Start Date

The procedures for using the insurance policy are detailed in a guide published by the Ministry of Human Resources and Social Development, available on the Ministry’s website.

The insurance coverage for expatriate workers officially came into effect on October 6, 2024.

Conclusion

The introduction of the Insurance Product provides an essential safety net for expatriate workers, ensuring financial stability even if companies face bankruptcy. This initiative reflects Saudi Arabia’s commitment to promoting fair labor practices and building a resilient labor market.

 

15 Oct, 2024 0 495
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