The Ministry of Labor has urged firms to immediately start implementing the 10th phase of the Wage Protection System before it becomes mandatory on March 31.

Mohammed Al-Faleh, assistant undersecretary for inspection and development of the work environment, was quoted as saying that this phase, for firms with 80 or more employees and introduced on Feb. 1 this year, covers 4,087 companies with about 362,000 employees.

He said that if firms fail to comply by the deadline, they would have all services cut, either temporarily or permanently depending on the type of offense committed. Al-Faleh was speaking at a function on Wednesday at the Riyadh Chamber of Commerce and Industry on various aspects of the system.

He said the system would eventually cover all companies. The 16th phase of the program would kick off on Sep. 1, 2017, which would cover firms employing 11 to 14 workers, according to the report.

During the workshop, Al-Faleh said that the system is aimed at monitoring the disbursement of wages for all workers in the private sector, Saudis and expatriates.

“It measures the commitment of firms and establishments to paying wages on time and the amount agreed between the two sides. This reduces disputes,” he said.

The ministry warned previously that companies failing to comply would be penalized, including having all services suspended. Firms have two months to ensure compliance after the 10th phase comes into force, with the deadline on March 31. The program was first introduced in Saudi Arabia for all companies with over 3,000 employees in September 2013, and has been applied gradually over the past two years.

Employers must open local bank accounts for their employees, set up a payroll file authenticated by the bank, register with the system, and submit all information related to the monthly payment of wages to the ministry using its e-services portal.

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