Levy on Foreign Workers Unconstitutional, Saudi Lawyer Says

The Saudi Ministry of Labor decision to to fine firms with too many foreign workers is unconstitutional, leading lawyer Abdulrahman al-Lahem said today.

In a blog post he published on his site, al-Lahem explained that according to Saudi law no fines can be imposed without a royal decree after the approval of both the Shoura Council and the Cabinet. Since the decision was issued by the Cabinet without the approval of Shoura and without a royal decree, this renders it unconditional, the lawyer said.

The new MOL policy, which came into effect earlier this month, makes it mandatory for private companies that employ Saudis less than half of the total number of its workers will have to pay an additional monthly fee for each expatriate worker.

Moufarrej al-Hagbani, the deputy minister of labor for planning and development, said in a statement that “The aim of this decision is to increase the competitive advantage of local workers by reducing the gap between the cost of cheaper expatriate labor and local labor, and developing national talent.”

The decision is the latest in a series of steps taken by MOL to increase the number of Saudi workers in the private sector, but it has faced resistance by business owners who complained that it would hurt their interests. Small business owners from Buraidah in the central province of Qassim gathered to protest the fee at MOL office in the city last week, according to local media repots. The owners reportedly accused the ministry of being unfair and said they would not comply with the order.

Some analysts agree with the business owners that imposing this is not a good idea. Economist Abdullah Al-Shadadi told Arab News Sunday the fee “will automatically lead to rise in prices in general besides raising the cost of government project contracts.”

Despite the protest, MOL is adamant that they will not reconsider. “The ministry will not go back on its implementation of the Council of Ministers’ decision No. 353 concerning the higher fees on expatriate laborers when their number exceeds Saudi workers,” ministry spokesman Hattab al-Anazi said in a statement.