Companies in the private sector are allowed by a Saudi ministerial decision on Monday to reduce salaries by 40 percent. In addition to this, it has also allowed termination of contracts due to the economic crisis occurring because of coronavirus pandemic.

According to a local newspaper, the cabinet will not publish the new decision.

Saudi Ministry of Human Resources and Social Development has signed a copy of the decision to maintain the labor contract in the current period. according to the decision, companies in the private sector are allowed to decrease the salaries by 40 percent for 6 months as per the actual effective wage in proportion to the hours of work. also, they  will be allowed to terminate the employment contract after 6 months of coronavirus situations.

Furthermore, the local newspaper reported that the employer would be allowed to reduce the wages even he/she gets subsidy provided by the government.

Apart from that, employees will not be permitted to terminate any employee unless these conditions are considered. According to the newspaper,

1. First, the passing of six months since the measures of salary cut has been taken
2. Reducing pay, annual leave, and exceptional leave were all used
3. The company proves that its facing financial troubles due to the circumstances.

According to the memo, the employee will get his/her salary if on annual leave within 6 months.

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