It is estimated that up to three million expatriate workers who are currently working in Saudi Arabia may suddenly find themselves without work as a result of mass redundancies aimed at avoiding the financial costs associated with securing appropriate sponsorship.
Private companies who have yet to fully legalize the work status of their foreign employees are now being forced to make them redundant amid fears that immigration authorities will be conducting raids on business premises. Any companies that are found to be hiring expats without the appropriate paperwork during these raids, which are designed to ensure that all companies are committed to the labor laws of Saudi Arabia, will face heavy fines for failing to adhere to nationalization laws.
In response, many private companies are taking the decision to make their employees redundant ahead of the raids and it is anticipated that up to three million expatriates could suddenly find themselves without work. It is expected that expatriates who work within small and medium businesses within the Red Zone of the nationalization system, “Nitaqat,” are the most at risk, since many private enterprises in this region will be unprepared to pay the financial penalties associated with hiring expatriate staff who do not have full sponsorship, nor will they have the funds to arrange such sponsorships.
Officials have disclosed that the raids will commence after the July 3rd deadline and that they will not be postponed or temporarily ceased during Ramada: “We will begin inspections directly following the end of the amnesty period to make sure private companies are committed to labor laws of the Kingdom. The raids will also continue during Ramadan and Eid Al-Fitr,” Col. Badr Al-Malek, a spokesman at the Passport Department, told Arab News.
Approximately 500,000 expats have already fully legalized their sponsorship status.