The Ministry of Human Resources and Social Development (MHRSD) and the Saudi Arabian Insurance Authority have launched a new insurance service designed to protect the rights of expatriate workers in private sector establishments.

The Expatriate Worker Wage Insurance Service for Private Sector Defaults becomes active as of the 6th of October 2024, which will ensure that expatriate workers receive their due wages in rare cases where employers fail to meet their payment obligations.

His Excellency the Minister, Ahmed bin Sulaiman AlRajhi, said:
“As part of our continued efforts to enhance the protection and rights of expatriate workers in Saudi Arabia, we are proud to introduce an insurance service that ensures fair compensation in rare cases where employers fail to meet their wage obligations.

This service - a safety net for workers in cases of extreme employer failure or financial distress - is an important step forward in safeguarding workers' financial security. Our commitment remains to create a more secure and equitable labor environment, where both employers and employees can thrive, making Saudi Arabia a leading hub for international talent and opportunity.”

Workers are entitled to benefit from the new service if their employer fails to pay wages by submitting claims through the designated insurance company responsible for handling compensation claims, according to the terms and benefits covered and defined by the insurance policy. These benefits include a travel ticket if the expatriate worker wishes to return to their home country. The Ministry will oversee the implementation and follow-up process to ensure compliance and smooth execution of this service.

The introduction of wage insurance does not absolve employers of their responsibilities, and the Ministry remains committed to holding employers accountable through proper enforcement measures. The Ministry's priority is to ensure that workers are paid on time, and this insurance service offers a protective measure in extreme cases of employer insolvency. The new insurance policy is not intended as a fallback for employers, and there are strict penalties in place for employers who deliberately fail to meet their wage obligations.

By introducing the new insurance service, the Ministry continues its ongoing efforts to protect the rights of both workers and employers while enhancing the overall efficiency and appeal of the Saudi labor market.