Wednesday 05 / February / 2025
Muscat: His Excellency Dr Mahad bin Saeed Baowin, Minister of Labour confirmed that the Sultanate has more than 400,000 registered companies, but only 265,000 of them appear in the Ministry’s database as they employ workers. Among these, approximately 245,000 are micro establishment, each employing between four to five expatriate workers without Omani employees, focusing mainly on basic service activities. Out of 1,600,000 workers in the commercial sector, around 1,100,000 expatriates are concentrated in these companies, while the remaining 20,000 companies employ about 500,000 expatriates and 265,000 Omanis. Notably, the majority of Omanis, around 185,000, are employed in approximately 700 companies, while the rest are distributed among companies employing more than ten Omanis.
His Excellency stated that the Ministry is working on localisation and training initiatives linked to employment in these companies, while also seeking alternatives and opportunities for Omanis in other businesses.
Maintaining Omani Jobs in the Private Sector
His Excellency emphasised the Ministry’s role in directly addressing challenges in the private sector, particularly regarding labour welfare and negotiations related to termination of services or wage reductions. Through serious negotiations, the Ministry has managed to retain more than 60,000 Omani citizens in their jobs during the years 2021, 2022, and 2023.
Each company is assessed individually to understand its financial capacity and determine whether it can sustain itself or is facing losses leading to liquidation or bankruptcy. In some cases, the termination of expatriate and Omani workers is approved based on these analyses, taking into consideration the difficulties companies may face when projects conclude, with affected workers being transitioned to the social protection system.
His Excellency further explained that the private sector is a key pillar of employment but faces stability challenges compared to the public sector. The Ministry is actively working to improve these conditions by enhancing job security and creating new opportunities that enable employees to transition between projects and improve their working conditions.
Wage Protection System Implementation
His Excellency stated that the Wage Protection System (WPS) has been in development for years and became mandatory through a decision issued in mid-2023. The system requires all private sector salaries to be processed through it to facilitate monitoring and resolve disputes between workers and employers. Its primary goal is to ensure workers receive their dues in an organised and timely manner while also safeguarding business owners.
The system was officially implemented in July 2023, granting large companies a six-month grace period and small and medium-sized enterprises eight months for compliance. By February 2024, full compliance was expected, but additional awareness campaigns were launched from April 2024 until the end of the year, delivering over 3,700,000 awareness messages and more than 200,000 warnings to non-compliant companies. At the beginning of this year, mandatory enforcement measures were activated to ensure compliance.
His Excellency added that the current surge in account registrations and compliance is due to rapid action by companies to avoid penalties. This system is not just a step towards transparency and order but reaffirms the Ministry’s commitment to protecting the rights of both workers and business owners.
Regulations and Compliance Monitoring
His Excellency stated that fines are not the Ministry’s primary goal, and it does not resort to them unless necessary. Achieving compliance and providing a stable and fair work environment requires the activation of such tools. The Ministry prioritises awareness, dialogue, and providing necessary facilities for business owners to register and adapt to the relevant laws and regulations.
The Ministry extended registration periods for over a year and a half to ensure all businesses had time to comply with the Wage Protection System. If a technical error or misunderstanding occurs during registration, companies are given an opportunity to correct it without fines upon providing necessary evidence. These measures are not punitive but designed to encourage companies to fully and correctly integrate into the system.
His Excellency concluded by stating that ample time has been given for companies to register, and the Ministry closely monitors the need for any further interventions. The goal is to improve services and regulate the market, ultimately benefiting all parties and contributing to improved international indicators as a natural outcome of these regulatory measures.
The Wage Protection System, which has received global awards, exemplifies the Ministry’s dedication to safeguarding workers’ rights and organising the labour market in a manner that also preserves the rights of business owners. The Ministry is working diligently to ensure Oman is recognised as a model in improving work environments and protecting the rights of all labour market stakeholders.
Labour Market Development and Future Strategies
His Excellency stated that Oman’s labour market, like any global labour market, has diverse sectors, some well-developed and others requiring further advancement. The oil and gas sector stands out with its fruitful initiatives, along with the banking and telecommunications sectors, which exhibit efficiency and effectiveness. The Ministry is continuously working with its partners in employment governance committees to enhance the regulation of key sectors such as healthcare, education, and public services, as well as vital sectors like tourism and food security.
A major challenge is aligning educational outputs with market demands. The Ministry seeks to bridge this gap through employment-linked training and localisation initiatives across various sectors. Additionally, 80% of the expatriate workforce is engaged in low-skilled jobs that Omanis generally do not prefer. However, the Ministry remains committed to bringing about positive change and encouraging economic sectors to drive sustainable development in the Sultanate.
Private Sector Employment and Organisational Challenges
His Excellency explained that two key aspects need to be reinforced in the labour market. The first is directing economic activities towards greater employment absorption by establishing large companies that support economic clusters in sectors capable of expanding recruitment. The second focuses on the urgent need to regulate these sectors to prevent disorder and ensure the availability of accurate and reliable data for future planning. The public sector faces the challenge of absorbing between 12,000 to 16,000 new employees annually, distributed across civil, military, and security sectors. Meanwhile, most job seekers gravitate towards the private sector, necessitating intensive efforts to strengthen its capacity to retain employees.
The Ministry is actively compiling precise and structured databases that enable effective planning for development and the integration of new graduates into the labour market in alignment with market needs.
Addressing Concerns About Fines and Business Compliance
When asked why some business owners feel the Ministry of Labour targets them with fines rather than offering genuine solutions for improving the work environment, His Excellency responded, stating that such concerns stem from a transition towards a more regulated and structured market. Compliant businesses do not face these issues, as they view regulatory measures as opportunities to protect their rights and enhance service quality. However, companies that have not yet reached optimal organisation may feel burdened by these regulations.
Adhering to laws and regulations is not only a legal duty but also an integral part of maintaining the integrity and stability of the market. The Ministry of Labour consistently ensures that the measures imposed are aimed at reducing harmful practices such as hidden trade, selling commercial records, and poor service quality. Ultimately, these regulations are designed to improve service standards, benefit consumers, and uphold workers’ rights, contributing to a healthier and more sustainable market for all stakeholders.
