Omanization program tightens rules on employers

IMPACT – MEDIUM

What is the change? In its ongoing efforts to strengthen local employment, Oman has tightened its rules on employers who do not hire Omani citizens.

What does the change mean? The Ministry of Manpower has taken enforcement action against 199 companies that failed to meet requirements for hiring local workers, and labor authorities have said that they will terminate work permits of any employers who fail to hire Omani workers.

• Implementation time frame: Immediate and ongoing.
• Visas/permits affected: Work permits.
• Who is affected: All Omani employers.
• Business impact: Businesses should be aware that they face fines as well as revocation of work permits if they fail to meet Omanization targets for their industry.
• Next steps: Companies are encouraged to conduct internal reviews to determine if they are in compliance with Omanization requirements that specify certain ratios of local to foreign workers depending on their sector.

Background: The ministry has conducted multiple raids of private employers across the country, ultimately finding violations by nearly 200 companies that employ more than 16,000 expatriate workers. According to the labor code, employers who do not meet required local hiring percentages will be fined 250 to 500 Omani rials (about US$650-$1300) for each local worker that is required to be hired, and penalties are doubled if a company does not reach the required hiring ratio within six months.

BAL Analysis: Companies should be aware that labor authorities are conducting inspections and strictly enforcing Omanization regulations. In addition to monetary penalties, employers risk suspension of work permits.

This alert has been provided by the BAL Global Practice group and our network provider located in Oman. For additional information, please contact your BAL attorney.

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