Saudi workers capped at 5 yearly contracts for Nitaqat counting

Summary

• Qiwa finalized a mechanism requiring no more than 5 contracts in 52 weeks for Nitaqat counting.
• Counting also requires a valid registered contract and a minimum registered salary of SR4,000.
• The rules tighten how employers can use job-hopping Saudi hires to meet Saudization quotas.

The latest

A Saudi employee whose contracts exceed five within the preceding 52 weeks will no longer count toward an employer's Nitaqat Saudization score, under a mechanism finalized by the Qiwa platform, which operates under the Ministry of Human Resources and Social Development. The platform set additional conditions tied to contract status, salary level and employment type before any Saudi worker is counted.

Details

• The threshold: Qiwa said an employee's contracts during the preceding 52 weeks, equivalent to one full year, must not exceed five for that worker to continue being counted as one Saudi employee under Nitaqat. The counting window is rolling rather than fixed to a calendar year.
• Contract validity: For a Saudi employee to be counted in Nitaqat, the employment contract must be valid and registered with Qiwa, the platform said. A contract that sits outside the platform does not feed into an employer's Saudization calculation.
• The salary floor: The employee's total registered salary on Qiwa must be at least SR4,000, according to the platform. Registrations below that level fall outside the counting mechanism, regardless of whether the contract itself is valid.
• Excluded categories: Workers registered on the platform as part-time employees or as students are not counted as Saudi employees under Nitaqat, Qiwa said, narrowing the pool of hires employers can use to lift their Saudization percentage.
• Seven-contract ceiling: Qiwa stated recently that a new employment contract cannot be issued to a Saudi employee who has entered into more than seven contracts within a 365-day period starting from the date of the first contract. The limit governs issuance, not counting.
• The waiting period: An eighth contract cannot be issued until a full year has elapsed from the date of the first contract in the period where the limit was exceeded, according to the platform. That mechanism is what previously triggered the system message to employers: "No new employment contract is allowed for the Saudi employee."
• Simultaneous jobs: On existing contracts, Qiwa said a Saudi employee may be bound by a maximum of two employment contracts at the same time. An employee holding two contracts who wants an additional job must first terminate one of them before concluding a new contract.
• Implementation detail: The platform did not announce a start date for the finalized counting mechanism, nor did it specify how employers whose Nitaqat bands are affected by the recount will be notified or given time to adjust their workforce numbers.

Background

Nitaqat is Saudi Arabia's Saudization program, which classifies private-sector firms by the share of Saudi nationals on their payrolls and ties access to government services to that ranking. Qiwa, operated under the Ministry of Human Resources and Social Development, is the state platform where employment contracts are registered.

Between the lines

Each condition Qiwa set narrows a different route to inflating a Nitaqat score: the SR4,000 salary floor limits nominal low-pay registrations, the part-time and student exclusions limit non-core hires, and the five-contract ceiling limits reliance on workers cycling rapidly between employers. Read together, the rules shift Nitaqat counting toward stable, full-time, adequately paid employment rather than raw headcount on the platform.

What's next

Watch for Qiwa guidance on when the counting mechanism takes effect, and for the first Nitaqat band reclassifications reflecting employees excluded under the five-contract, SR4,000 and part-time criteria.

Source: Saudi Gazette via ZAWYA