SAUDI ARABIA: Ministry of Labor Cancels Yellow Nitaqat Band
Effective 26 January 2020, the Ministry of Labor and Social Development (MLSD) has announced it will cancel the yellow band in its Saudization programme, Nitaqat. Companies currently in the yellow band will be moved into the red band and will become non-compliant unless they improve their Nitaqat rating.
What is Nitaqat?
Nitaqat is a program of Saudization, aiming to increase employment of Saudi nationals in the private sector, giving companies privileges, requirements, or limitations in the visa process for their foreign workers, based on the percentage of their workforce made up of Saudi nationals.
Companies are grouped by industry sector and company size, then ranked into six categories (Premium, High Green, Medium Green, Low Green, Yellow, and Red) of Saudization – the percentage of the company’s workforce that must consist of local workers.
Companies in the red band have the most restrictions; they are unable to hire new foreign national employees, renew work permits, or open a new business or branch in Saudi Arabia until they have improved their Nitaqat rating. Red band companies also forfeit their authority to give permission to their employees to change employers in Saudi.
Employers who may be affected are encouraged to contact a Newland Chase immigration specialist for case-specific advice.