Saudi Arabia’s Ministry of Human Resources has announced certain proposed rules concerning recruitment and labor service companies, Gulf News reported.
The ministry has invited public to submit feedback on the new framework.
Large Companies
According to the proposed regulations, the ministry demands large human resources companies to provide a bank guarantee of SR10 million and maintain a paid-up capital of SR100 million. Therefore, they can secure a 10-year license.
Medium-Sized Firms
As for medium-sized firms, they are required to provide a bank guarantee of SR5 million and have a paid-up capital of SR50 million to obtain a five-year license.
Small Recruitment Firms
Small recruitment firms must provide a bank guarantee of SR2 million and maintain a paid-up capital of SR5 million.
Crucially, recruitment offices have a two-year grace period to transition to one of these categories.
Insurance Coverage
Furthermore, the regulations allow the ministry to demand insurance coverage for risks caused by technical, labor, or professional failures.
This coverage must be compatible with the company’s size, nature, and operations.
Moreover, companies may not practice their business if their remaining insurance period is less than six months.
The regulations also included that the ministry may ask for an increase in the bank guarantee based on various factors such as:
- Market fluctuations
- An increase in visa requests
- Rising complaints
- Delays in recruitment
- Contract fulfilment
Meanwhile, the regulations have mandated companies to display all service prices on a ministry-approved website. Moreover, they must provide details of employees authorized to coordinate with Saudi embassies abroad as well as disclose recruitment costs.
Interestingly, the rules stressed the need for licensees to employ personnel proficient in the languages spoken by recruited workers.
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