On August 17, 2020, the Sultanate of Oman has issued Royal Decree 82/2020 (RD) on the new Job Security Fund which will come into effect on November 01, 2020. The disbursement of funds to jobless Omani nationals by the Government commences from November 01, 2020 while the contribution to this fund is from January 01, 2021.
The Job Security Fund aims to support and protect Omani nationals who have been made redundant or have lost their jobs. His Majesty Sultan Haitham bin Tarik contributed 10 million Omani Rial (OMR) to the Fund.
The system will work in two phases:
- 1. The first phase will involve disbursement of funds to Omanis whose services were terminated, and this will commence on November 01, 2020,
- 2. The second phase will start after three (3) years of the system’s establishment, during which a subsidy will be disbursed to job seekers.
From January 01, 2021 Omani citizens employed by both private and public sectors are required to contribute one percent (1%) of their monthly salary and contributions of equivalent value will also be due from the employer. Employers should deposit the contributions into a bank account, as instructed by the Public Authority for Social Insurance (‘PASI’). Additionally, five percent (5%) will be added to the fee for the license or renewal of license for non-Omani manpower.
Omani employees who have been terminated (with exception to those terminated for disciplinary reasons) and have completed their probation period with the employer are qualified to receive benefits from the Fund provided that they are not receiving retirement benefits, or are enrolled as a student in any educational institutions.
The benefit is paid for a maximum period of six (6) months at the rate of sixty percent (60%) of the average contribution wage during the twenty-four (24) months preceding the termination of service.
We are expecting the authorities to issue further details on how this new reform will be implemented and shall keep you posted on further developments.