Aug 15, 2018 6 min read

Saudi Arabia Payroll Outsourcing Alert

Mercans’ Saudi Arabia Payroll Outsourcing solutions guarantee compliance.

Saudi Arabia payroll outsourcing leader Mercans has issued the following Wage Protection System (WPS) compliance-related alert to the companies operating in Saudi Arabia. Mercans offers legally compliant payroll outsourcing and PEO solutions in Saudi Arabia, that ensure full compliance with the complex WPS and payroll processing regulation. Consider Mercans’ Saudi Arabia payroll outsourcing solutions for the guaranteed fulfillment of all legal requirements established by the Saudi Arabia Ministry of Labor.

WPS Compliance Actively Enforced by the Ministry of Labor in Saudi Arabia

The Saudi Arabia Ministry of Labor (MOL) introduced WPS in 2013. Currently, all companies with more than 10 employees are required to follow and comply with the WPS requirements in order to avoid penalties by the MOL. The below Frequently Asked Questions, prepared by Mercans Saudi Arabia payroll outsourcing specialists, will provide you the must-know information regarding the WPS process in Saudi Arabia.

What is the Wage Protection System (WPS)?

The WPS regulations were introduced to ensure, that all employers pay their employees on-time and fully. The WPS process allows the MOL to centrally and electronically monitor in real time the salary payments of the participating employers and take enforcement actions if the salary payments are not made in accordance with the Labor Law and employment agreements.

What is required for the WPS registration?

Employers with more than 10 employees are required to process all of their salary payments through the WPS system. For this, the employer has to complete the following actions:

How does the WPS process work?

The objective of the WPS process is to monitor the salary payments by the employers and ensure, that all employees receive their full salaries. In order to accomplish this objective, the employers are required to comply with the following WPS processing steps on a monthly basis:

How is the WPS information used by the MOL?

The MOL records all salary payments made by employers and compares these amounts with the information provided by the employers when registering their employees with GOSI. During this process the MOL completes the following verifications:

What are the common issues with the WPS payments?

Since the WPS process is fairly new and the reporting requirements have not been clearly defined or communicated, there are a number of common issues experienced by the employers, which may lead to inadvertent non-compliance with the WPS process requirements. Some of the most common issues have been summarized below:

Employers should ensure that they avoid these common pitfalls when processing salaries through the WPS process.

What are the consequences of the non-compliance with the WPS procedures?

The MOL is actively monitoring and enforcing the compliance with the WPS processes. In case of non-compliance, the MOL services will be suspended until the company processes all salary payments in conformity with the WPS requirements. This means, that the employers need to ensure their full compliance with the WPS regulations to avoid any unexpected gaps in their MOL services, including Iqama transfers, renewals, etc.

Please contact Mercans’ Saudi Arabia payroll outsourcing specialists at [email protected] for additional information regarding the WPS compliance requirements or to discuss Mercans’ Saudi Arabia payroll outsourcing solutions. Mercans’ Saudi Arabia payroll outsourcing services are the best approach for legally compliant payroll operations in Saudi Arabia.

 

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