Impact of COVID-19 on Time, Social Insurance and Visa Management in Saudi Arabia
In light of the efforts made by the Government of Saudi Arabia Kingdom to confront #COVID-19 and prevent its spread, the Ministry of Human Resources and Social Development has announced since mid of March, a series of new legal measures with immediate effect which impact many areas of HR.
I am going to focus here on the most 3 important announcements:
- Obligatory Leaves and Suspension of Attendance due to COVID19 which has impact on Time Management.
- SANED salary starting from May due to COVID19 which has impact on Social Insurance (GOSI)
- Employees with Exit/Reentry Visa can “Return” home during COVID19 which has impact on Visa Management.
Saudi Arabia Localization team spared no effort and have responded quickly with adequate solutions to help our SAP ERP HCM and SuccessFactors customers adapt to the #COVID-19 emergency, below is a summary for the impact and the provided solutions for each area.
What is the impact on Time Management?
In Time Management, we have covered 8 different cases touching 6 different types of leaves, introducing 3 new Leave Types such as Compulsory Sick Leave, Exceptional Official Leave, you will be able to easily map the cases with the Leave Types if you follow the below diagram:
You will find answers even for the cases that were not clearly explained in the law, like which leave type should be used in case employee was put in quarantine, etc…
Employer can limit the employee salary to the productive hours, or in other words, reduce his salary by the non-productive hours that’s why we have introduced a new unpaid Leave Type Non-Productive Hours.
The complete details of the solution can be found in this SAP Note.
The Labor Authority in Saudi Arabia also obligates employers to apply health disclosure mechanism from all workers who exhibit the virus symptoms or in touch with an infected or suspected case, one of the good solutions we came across is this partner extension for tracking employee health:
What is the impact on Social Insurance (GOSI)?
Moving to Social Insurance (GOSI), since localization is not limited to legal changes we also had to consider the market practice of deducting “SANED” salary from the monthly salary instead of stop paying the monthly salary using deduction wage type.
There are still many other ways to apply “SANED Deduction” on salary such as applying 60% unpaid leave but still you need to take the 9,000 SAR deduction limit in your consideration.
What we have recommended is to apply wage type deduction with percentage with deduction limit. We don’t recommend reducing the basic salary directly since other calculations such as End of Service and other wage types valuated based on basic salary might be affected.
More details can be found in this SAP Note.
What is the impact on Visa Management?
Concerning Visa Management, expat employees were not able to return to home country since travel was banned in Saudi Arabia, expat employees can apply for special “Return” request on the “Absher” portal to be able to travel but they first need to have Exit/Reentry Visa.
The visa should be issued for the expat employee and this can be done using SuccessFactors Visa & Permits Management (which is now integrated with “Muqeem” system). After this is completed, the employee can apply for the return Visa from “Absher”.
Are there more legal changes related to HR coming up in Saudi Arabia ?
Yes, we expect more legal changes in the future to affect the Saudi labor market so stay tuned by subscribing to Announcement of Legal Change.
In order to find all new legal announcements published in the SAP ONE Support Launchpad, you can easily filter by using the Keyword “covid”.
The SAP Note number (once solution becomes available) can be found in the header of the SAP Announcement itself.
Finally I would like to thank all customers who shared their input and view which helped us a lot during analysis phase and we hope that you continue supporting us by giving your continuous feedback in MENA Localization User Group Jam page.