Social Insurance Law - Implementing Regulation

8/9/2019 Social Insurance Law - Implementing Regulation

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DECISION OF THE MINISTER OF LABOUR AND SOCIAL AFFAIRS

NO. 128/INSURANCE DATED 25/10/1421 H.

THE MINISTER OF LABOUR AND SOCIAL AFFAIRS,

Having reviewed the Social Insurance Law issued under Royal Decree No. M/33

Dated 03/09/1421 H;

Having reviewed the old Social Insurance Law Implementing Regulations

constituting the rules and procedures for registration, assessment and collection of

contributions, survey of establishments, submission of appeals, rules and procedures

for application of the Annuities Branch, rules and procedures for application of the

Occupational Hazards Branch, rules and procedures for regulating the activities of the

inspection agencies and rules and procedures for the medical board membership,

issued by the Decisions of the Minister of Labour and Social Affairs No. 2/Insurance

dated 11/9/1392 H, No. 15/Insurance dated 28/1/1395 H, No. 19/Insurance dated7/11/1395 H, No. 61/Insurance dated 6/4/1402 H, and No. 104/Insurance dated

13/3/1411 H, respectively, and the relevant amending decisions;

As the new Law demands issuance of new implementing regulations taking into

consideration the new and revised provisions thereof; and pursuant to the Decision of

the Board of Directors of the General Organization for Social Insurance No. 735

dated 25/10/1421 H. concerning the Regulations it has adopted in substitution for the

said old Regulations,

DECIDES AS FOLLOWS:

ARTICLE (1)

For the purposes of application of the provisions of the Social Insurance Law issued

under Royal Decree No. M/33 dated 03/09/1421 H. the following Regulations

attached hereto shall be put into effect:

1. Registration and Contribution Regulations

2. Annuities Branch Benefits Regulations

3. Occupational Hazards Branch Benefits Regulations

4. Medical Board Regulations

ARTICLE (2)

For the purposes of definition of the terms set out in the Regulations mentioned in the

preceding Article, they shall have the meanings provided for in Article (2) of the Law

and in the said individual Regulations in addition to the meanings of the following

terms:

1. New Law : The Social Insurance Law issued under the Royal Decree No. M/33dated 03/09/1421 H.
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2. Old Law : The Social Insurance Law issued under the Royal Decree No. M/22

dated 06/09/1389 H.

ARTICLE (3)

The provisions of these Implementing Regulations be considered as supplementing,

explaining and elaborating the provisions of the Law.

ARTICLE (4)

1. The Governor of the General Organization for Social Insurance may amend the

forms incorporated in the Regulations attached hereto and issue such other forms as

he may deem necessary. He may also explain or detail any of the provisions of the

said Regulations.

2. The Governor may delegate some of his powers provided for in the attachedRegulations to such officials of the Organization as he may designate.

ARTICLE (5)

1. In application of the provisions of paragraph (2) of Article (68) of the Law, the

Regulations Implementing the old Law issued by the Ministerial Decisions referred to

in the preamble of this Decision shall become null and void.

2. The previously issued decisions concerning special handling of certain cases of

employers and insured workers shall remain valid, provided that they do not

contradict the provisions of the Law and the Regulations attached hereto.

3. the decisions already issued in respect of the work organization and procedures

shall remain valid so long as they do not contradict the provisions of the said Law and

Regulations until they are amended or replacement decisions are issued.

ARTICLE (6)

This Decision and the Regulations attached hereto shall be published in the official

gazette and shall take effect on and from the date on which the Law is put into effect,

and the Governor of the General Organization for Social Insurance shall take themeasures necessary to give effect thereto.


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Ali I. Al-Namlah Minister of Labour and Social Affairs REGISTRATIONAND CONTRIBUTION REGULATIONS

CHAPTER IINTRODUCTORY PROVISIONS

ARTICLE (1)For the purposes of definition of the terms set out in these Regulations, they shall

have the meanings provided for in paragraph (2) of the Social Insurance Law andArticle (2) of the Decision of the Minister of Labour and Social Affairs No.128/Insurance dated 25/10/1421 H (20/01/2001 G) issuing the Regulations inaddition to the following:

1. The term "employer" means any natural or legal person employing one ormore compulsorily covered workers under a contract regardless of its period,nature or form in consideration of a wage.

2. The term "establishment" means the legal entity through which the employerconducts his activity and which bears his name or the commercial name of suchactivity.

3. The term "branches of the employer" means the various premises through

which the employer conducts one activity.

4. The term "employer's registration number" means the number of registrationof the employer or his branches with the Organization.

5. The term "insurance number" means the permanent number of the insuredpersons registration with the Organization.

6. The term "insurance card" means the card issued by the Organization to theinsured person on his registration for the first time and which bears his

permanent insurance number.

7. The term "contribution month" means the Hijrah or Gregorian month for whichcontribution is payable in accordance with the calendar followed by the employer.

8. The term "contribution year" means the year for which the contribution ispayable and which starts from Moharram or January according to the calendar

used.

9. The term "basic wage" means the amount received by the insured person, whois compulsorily covered under the Law, in consideration of his work by virtue of a

written or unwritten contract regardless of the method of payment orcomputation of such wage, less the allowances that may be granted according tothe work nature, risk or place or for overtime working hours or for any otherreasons no matter under whatever titles they are granted for, and less thegrants, annual bonuses and benefits in kind.

There shall be considered as basic wage the commission, the percentage of thesales value, and the percentage of the profit notwithstanding that it may be paid

alone or in addition to a fixed wage.

10. The term "contributory wage" means the wage of the compulsorily insured


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worker according to which the monthly contribution is payable under theprovisions of Article (16) of these Regulations.

11. The term "income category" means the monthly amount chosen by thevoluntarily covered person from among the income categories included inSchedule No. (1) attached hereto and taken as a basis for the computation of the

amount of the monthly contribution payable by him and the amount of benefitshe may be entitled to, and it shall be regarded the same as the contributory wage

in respect of the compulsorily covered person.

12. The term "insured persons share" means:

a. the contribution payable by the compulsorily covered person for eachcontribution month by deduction from his wage provided for in paragraph 2(a) ofArticle (18) of the Law, or

b. the contribution payable by the voluntarily covered person for each

contribution month provided for in paragraph (1) of Article (8) and paragraph2(b) of Article (18) of the Law.

13. The term "employer's share" means the contribution payable by the employeron his insured worker's account for each contribution month in accordance withthe provisions of paragraphs (1) and 2(a) of Article (18) of the Law.

14. The term "period of delay" means the number of the months of delay startingwith the day immediately following the fifteenth day prescribed as the time limit

for payment of contributions and ending with the day of actual payment thereof,counting each fraction of a month as a complete month.

15. The term " fines for delay " means the amounts the employer or voluntarily

insured person is liable to pay for the periods of delay in payment of the monthlycontributions.

ARTICLE (2)

With due regard to the successive stages of implementation of the Law and therequirements of application of the Law and its Implementing Regulations, theOccupational Hazards Branch shall apply to the Saudis and non-Saudis, but theAnnuities Branch shall apply to the Saudis only. Application shall be compulsoryor voluntary, as applicable, subject to the following details:

1. Compulsorily covered persons:

a. The workers who have had contractual relationship with the employer for

carrying out a work primarily within the Kingdom of Saudi Arabia in considerationof a wage, regardless of the nature, form or duration of such relationship or ofthe amount or kind of the paid wage, provided that the worker shall be under 60Hijrah calendar years on the starting date of coverage under the AnnuitiesBranch, with due regard to the provisions of paragraph (2) of Article (4) of the

Law. Under this meaning, the trainee shall not be considered a worker unless histraining is intended for apprenticeship.


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b. The Saudi worker who works abroad for an employer who has a head officewithin the Kingdom shall be covered under the Annuities Branch so long as awork relationship is established to have been existing between the worker andthe employer.

c. The employees of the State bodies and semi-State bodies who do not benefitfrom the Civil or Military Retirement Schemes.

2. Voluntarily covered persons: are the Saudi nationals belonging to the followingcategories:

a. The persons engaged in liberal professions such as physicians, engineers,lawyers, consulting office owners, etc. subject to obtaining from the appropriate

authority a license to practice their professions.

b. The persons who conduct, for themselves, or in partnership with others, acommercial, industrial, agricultural or service activity and are established, from

the respective commercial register or license or any other document issued bythe appropriate authorities, to have been exercising such activities.

c. Tradesmen who exercise their trades by virtue of a license issued by theappropriate authorities, such as blacksmiths, carpenters, plumbers, and the like.

d. The workers who are employed abroad but have no work relationship with anemployer who has a head office within the Kingdom, provided that a certificateshowing his engagement in employment and duly attested by the Saudi Embassyin the country of residence is submitted.

e. The insured persons whose compulsory coverage under the Annuities Branch

has ceased due to their departure from the scope of compulsory coverage andhave expressed their wish to continue their membership in accordance with theprovisions of Article (8) of the Law.

f. The Saudi citizens working in foreign international or diplomatic or militarymissions in the Kingdom may, if not compulsorily covered, demand voluntarycoverage under the Scheme, in which case, they shall be treated the same as thecategories provided for in paragraph (4) of Article (4) of the Law.

3. Excepted Categories:

a. Government employees including the civil servants and military personnel whoare covered under the relevant retirement schemes, and this exception does notinvolve the retirees who satisfy the conditions for coverage under the Scheme.

b. Foreign employees working in foreign international, diplomatic or militarymission: They are meant to be the non-saudi employees or workers who work inany of these missions notwithstanding that the worker and his employer may not

have the same nationality.

c. Workers employed in agricultural, forestry or pastoral works: They are meant


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to cover any one engaged in forests or land farming, crops watching oragricultural machine operating and servicing. This exception does not apply to thefollowing categories of workers who are engaged in such activities:

1. The workers who are employed in the agricultural enterprises that manufacture

their own products.

2. The workers who are subject to the Labour and Workmen Law.

3. The workers who are employed in state bodies and semi-state bodies.

4. The workers who are employed in the companies established in accordancewith the Companies Act or Foreign Capital Investment Law.

5. The workers who are employed in private establishments, which employtwenty or more workers.

d. The seamen who are employed on board of transporting or fishing ships. This

exception does not apply to the following categories of workers who are engagedin such activities:

1. The workers employed in the premises of an employer who has taken the seaor fishing works as his own trade; and in case any of such workers is transferredfrom the employer's premises to the sea activities of the same employer, he shallcontinue to benefit from the Law so long as it is applied to him.

2. The seamen who are employed in marine establishments that manufacture

whatever is fished by their own ships; and the Governor shall explain themeaning of manufacturing intended by this provision.

3. The workers who are subject to the Labour and Workmen Law.

4. The workers employed in state and semi-state bodies.

5. The workers employed in companies established in accordance with theCompanies Act or Foreign Capital Investment Law.

6. The workers employed in private establishments which employ twenty or moreworkers .

e. The domestic servant who is meant to be the domestic worker employedexclusively in domestic service.

f. Foreign worker who is brought into the Kingdom to carry out works whichusually take no more than three months to complete, such as visiting physicians,consultants and the like.

g. Artisans who are self-employed, employ no workers and take their homes as

their business premises.

h. Employer's family members who work in the family firms employing no other

workers and are taken to mean the family members provided for in paragraph (8)of Article (2) of the Law.


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The excepted categories in paragraphs (g) and (h) may request voluntarycoverage provided for in Chapter V of these Regulations.

The exception pertaining to the categories mentioned in items (c), (d), and (e)

above shall not prejudice their future coverage under the Law in accordance withthe provisions of paragraph (2) of Article (5) of the Law.


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CHAPTER IIREGISTRATION

ARTICLE (3)

1. The following forms shall be used for the registration of the non-

government sector employers and their workers:

a. Form No. 1/Insurance for registration of an employer with the Scheme.

b. Form No. 2/Insurance for listing of workers employed by an employer.

c. Form No. 3/Insurance for entering and leaving employment by a Saudi

worker.

d. Form No. 4/Insurance for payment of contributions.

e. Form No. 5/Insurance for entering and leaving employment by all workers

of an employer during the month.

2. The workers in the government sector shall be registered in accordance with

the decision of appointment and shall be excluded in accordance with the

decision of termination.

3. The registration of the voluntarily covered persons shall be done by the use

of Form No. 7/Insurance for application for coverage under the Scheme by the

categories mentioned in paragraph (4) of Article (4) of the Law or for

application for continuation of coverage under the Annuities Branch pursuantto the provisions of Article (8) of the Law.

ARTICLE (4)

1. The Governor may except some employers from using all or part of the

forms prescribed in the preceding Article and permit them to have them

replaced by alternative forms so long as that better serves the Organization

work system, particularly the automated methods of preparing employer's

accounts.

2. The Governor shall prescribe the formats and descriptions of the forms andcertificates provided for in these Regulations and the terms and conditions of

use and times of submission thereof.

ARTICLE (5)

The Organization shall print the forms provided for in these Regulations and

distribute them for a payment to be determined by the Governor or otherwise

free of charge in such cases as may be determined by the Governor.

Nevertheless, employers may, by Governor's approval, print all or some of

these forms at their own expense, but only in such quantities as are necessary

for their own use, and in no circumstances may an employer or any other


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person print such forms for the purpose of trading in or selling them to others

except by the consent of the Governor. In all cases, the forms printed by

employers shall include the same particulars as those on the forms approved

by the Organization and be of the same specifications as to size, colour and

spacing and include reference to the number and date of the Governor's

approval of printing thereof.

ARTICLE (6)

If an employer has numerous branches or activities, he shall be treated in

accordance with the following rules and procedures :

1. For the purposes of determination of the starting date of coverage of each of

the employer's activities:

a. In case of various employer's activities of which each is founded according

to the applicable laws and has a legal entity and independent financial liability,any of the activities separated from the others shall be treated as an

independent employer, notwithstanding that the proprietor of such activity is

the same proprietor of the other activity or activities.

b. In cases other than that provided for in the preceding paragraph, all

employer's activities and branches shall be considered an integrated unit so

long as the proprietor of each activity or branch is the same proprietor of all

the other activities or branches.

2. For the purposes of submission of forms and payment of contributions:

a. If the employer has numerous branches of the same activity, the group of

branches falling within the jurisdiction of one office shall all be treated as one

employer. However, each of the branches falling within the jurisdiction of

various offices, shall be treated as an independent employer.

b. If the employer has various activities of which each has its own independent

financial entity, each activity shall be considered as an independent employer,

notwithstanding that such activities fall within the jurisdiction of one office.

However, if any of such activities has no independent financial entity, it shall

be treated in accordance with the provisions of the preceding paragraph.

c. The Governor may, for the purpose of maintaining the work interest,

consider the branches or activities of the employer as an integrated unit in

their dealings with the Organization or accept centralized payment of

contributions for all branches and activities through the head office or

decentralized payment through each of the various branches of activities, or

centralized payment for some of them and decentralized payment for the

others, so long as that facilitates dealing with the employer and does not

contradict the work interests of the Organization.

ARTICLE (7)


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The Organization shall maintain a full register of the employers and shall

update the same regularly. To do so, the Organization may conduct a

comprehensive field survey or inspection of establishments in all parts of the

Kingdom, have access to the data available at all state bodies, semi-state

bodies and chambers of commerce and industry and avail itself, as necessary,

of the services of the administrative bodies. The Governor shall set theprocedures for the implementation of the provisions of this Article.

ARTICLE (8)

1. The employer shall submit the duly completed forms required under these

Regulations within the prescribed time limits, and failure in doing so shall

justify the imposition of the penalties provided for in Article (62) of the Law.

2. The Governor, if he is satisfied as to the reasons of delay in submitting the

said forms, may excuse such delay and may, on the initial implementation of

Law, extend the time limit prescribed for the submission of such forms.

ARTICLE (9)

1. Subject to such decisions as may be issued, every employer to whose

establishment the Law applies shall present to the Organization's Office,

within which jurisdiction his establishment head office falls, the following:

a. An application for registration of his establishment on Form No.

1/Insurance for the head office of the establishment and a separate one for

each branch or activity treated as an independent employer, and such

application form shall be submitted to the Office, within which jurisdiction

the premises of such branch or activity falls, within two weeks at the most

from the date on which the head office of the establishment meets the

requirements of coverage under the Law.

b. The required data in respect of his workers which shall be given on forms 2,

3 and 5/Insurance, as applicable, associated with a copy of an official

document confirming the date of birth or a copy of civil status identification

card for the Saudi workers or a copy of the passport for the non-Saudi

workers, as applicable, and such forms shall be submitted along with the form

for registration of establishment referred to in paragraph (a) above, or withinthe first fifteen days of the month immediately following the first month for

which contributions become payable, in which case the said forms shall be

associated with the contribution payment cheque and Form No. 4/Insurance.

2. The employer shall, after the registration of his establishment and workers

in accordance with the provisions of paragraph (1) of Article (9) of these

Regulations, do the following on timely basis:

a. To notify the appropriate office of any new worker who enters employment

provided that the notification shall be effected within the first fifteen days of

the month immediately following the month in which the worker has enteredemployment. Such notification shall be made by completing Form


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No.3/Insurance or 5/Insurance, as applicable, associated with a copy of the

documents referred to in the preceding paragraph 1(b) together with the

contribution payment cheque or voucher.

b. To notify the appropriate office of any worker who leaves employment,

within the time limit prescribed for payment of the contributions due for themonth of leaving employment, and such notification shall be made by

completing Form No. 3/Insurance or 5/Insurance, as applicable. The

notification shall be sent to the appropriate office together with the other forms

concerning the insured workers who are still in employment, accompanied by

the payment cheque or relevant supporting document.

3. The worker shall have the right to notify the appropriate office of his entry

into employment and request for registering him, if the employer fails to do

so, provided that such notification shall be made within the fifteen days

immediately following the time limit prescribed for the employer to register

his workers provided for in the preceding paragraphs 1(b) and 2(a), asapplicable. The appropriate office shall, in this case, force the employer to

register such worker, so long as he has met the requirements of his

registration.

ARTICLE (10)

The employer shall notify the office of the Organization of any changes in the

nature, legal status, or address of the activity he practices or in the competent

staff signatures or of loss or replacement of stamps, otherwise the employer

shall bear the consequences of failure to notify or delay in doing so. Such

notification shall be effected within two weeks from the date on which such

changes have occurred.

ARTICLE (11)

1. The offices of the Organization shall register the employer and notify him

of his registration number within two weeks from the date of submission of

the relevant forms.

2. The offices of the Organization shall issue numbers to the insured persons

upon their registration with the Organization for the first time, and theinsurance numbers thus allocated shall be permanent throughout their period

of membership in the Scheme. A new member may not be allotted an

insurance number previously allotted to another insured person who has left

service for any reason.

3. Employers shall maintain their registration numbers and their workers'

insurance numbers and quote such numbers on all correspondence concerning

the application of the provisions of the Law.

ARTICLE (12)


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1. The offices of the Organization shall issue an insurance card for each

insured person upon his registration for the first time, and this card shall

contain the following particulars:

- Full name of the insured as per the official document used for his

registration.

- Insurance number.

- Such other information as the Organization may deem necessary to be

included in the card.

2. Such card shall be sent to the employer for whom the insured person is

working at the date of registration for delivery to the respective insured

person. If the employer fails to deliver an insured persons card, he shall return

the card to the office which shall attempt to make the delivery thereof. The

card may also be delivered directly by the Organization to the respectiveworker. The voluntary contributors shall receive their cards in person from

the office.

3. The contributor shall preserve his contribution card in good condition, and

he shall produce it to any employer for whom he works and take it back after it

has been duly noted by the employer. The contributor, or his family members

in the event of his death, shall quote the contribution number on all

correspondence related to any issues pertaining to the application of the

provisions of the Law.

4. If a contributor loses his contribution card, he shall immediately report the

loss to the office of the Organization which issued the card, and the office

shall issue a replacement, in which case the Organization may charge for the

replacement a fee to be determined by the Governor's decision.

ARTICLE (13)

1. The Organization shall grant every employer, upon his request, a certificate

evidencing his registration with the Scheme, and this certificate shall be

prepared in accordance with the form made for this purpose and shall not be

regarded as valid unless it bears the official stamp of the Organization.

2. Where an employer has more than one branch or activity and each branch or

activity is to be dealt with as an independent employer as provided for in

Article (6) of these Regulations, a separate certificate shall be issued for each

branch or activity and one certificate shall be issued to any group of branches

or activities considered to be one employer.

As an exception to this provision, if the branches or activities are owned by

one natural person or are financially dependent on one legal person, the

certificate shall not be issued to any of such branches or activities unless the

said employer has discharged all his obligations pertaining to all such


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branches or activities notwithstanding that any of them may be treated as an

independent employer for the purposes of payment of contributions.

3. The certificate referred to above shall not be issued or renewed until the

employer submits the required forms and discharges all his obligations

towards the Organization as of the date of issue of the certificate.

4. Where the conditions for application of the Law to an establishment of an

employer have not been fully satisfied yet, the respective employer may obtain

a certificate to this effect from the Organization.

5. The certificates referred to in the preceding paragraphs shall be valid for the

period and according to the conditions set out in each certificate.

6. The said certificates shall be considered as official government documents

that are absolutely forbidden to be printed, or falsified or modified by addition

or deletion or by fraudulent alteration of the contents thereof otherwise theyshall be considered as null and void. Nor may they be used for purposes other

than those for which they are issued in accordance with the provisions of the

Law.

ARTICLE (14)

The insured person may request a statement of his period(s) of contribution to

the Scheme. Any of his family members may also request such statement in

the event of his death. In all the foregoing cases, the statement shall be given

free of charge. Such statement shall only be valid for the purpose for which it

is issued, without having any other consequential liabilities towards the third

party. The issuance of this statement shall not prejudice the Organization's

right to make such changes in the information included in the certificates as it

may deem necessary on the basis of the revealed events.

ARTICLE (15)

1. In the event of expiry of the time limits given to the employer to register his

workers or to the worker to apply for registering himself if the employer fails

to register him, retroactive registration of such worker may only be effected by

the Governor's approval subject to meeting the following requirements :

a. The fulfillment by both the employer and the worker of the conditions of

compulsory coverage under the Law during the period required to be

registered on the basis of such documents as may be satisfactory to the

Organization.

b. The required contributions shall be paid for the period for which a

retroactive registration is required on the basis of contributory wages that are

comparable with the wage recorded at the Organization for the same insured

person for a former or subsequent period, with due regard to the wages listed

in the Schedule of the income categories attached to the Regulations. For this


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purpose, the contributory wage taken as a basis for payment of contributions

due for the said period shall be determined as follows:

1. If the period required to be recorded is subsequent to a period already

recorded at the Organization , the contributory wage for the first year required

to be recorded shall be the income category that is immediately higher thanthe last wage recorded at the Organization, and it may be graduated upward

for the next one or more years of the period required to be recorded, with due

regard to the order of the graduated income categories shown in the said

Schedule.

2. If the period required to be recorded is earlier than a period already

recorded at the Organization, the contributory wage for the last year required

to be recorded retroactively, shall be the income (wage) category immediately

lower than the first wage recorded at the Organization, and it may be

graduated downward for the next one or more years of the remaining portion

of the period required to be recorded, on the basis of the order of the incomecategories shown in the said Schedule.

In exception of this provision, the recording of wages specified by the

employer for periods not already recorded shall be accepted, if such wages

exceed the wages prescribed in the said schedule of income categories (1).

3. If the period required to be recorded falls between two periods already

recorded at the Organization, the contributory wage for the last year required

to be recorded , shall be the category immediately lower than the first wage

recorded at the Organization for the subsequent period already recorded, then

it is graduated downward for one or more years of the remaining portion of

the period required to be recorded in the manner provided for in paragraph

b(2), provided that the lowest wage reached by such graduation shall not be

smaller than the last wage recorded at the Organization for the period

preceding the period required to be recorded.

4. If an applicant for retroactive recording of an employment period has not

been previously covered under the Scheme and is required to be registered for

the first time, his contributory wages shall be determined on the basis of the

last contributory wage fixed by the employer for the last year of the period

required to be recorded, and the wage shall be graduated downward for one ormore years of the remaining portion of the period from the immediately lower

income category in the order shown in the said Schedule.

5. The Governor shall set such examples and details as may be required for the

application of the provisions of the preceding paragraphs (1).

6. As an exception to the provisions of the preceding paragraphs if an

employer applies, for the first time, for retroactive registration of his

establishment with effect from the date on which the requirements of coverage

of both his establishment and workers under the Law are met, his workers

shall be registered on the basis of such wages as the employer may specify ifthey exceed the wages prescribed in the schedule of income categories(1).


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c. The fines for delay shall be paid to a maximum of 100% of the due

contributions subject to the following exceptions :

1. Fines for delay with no maximum shall be imposed on the employer who is

discovered to have deducted the worker's share of contributions and retained itwithout delivery of the same to the Organization due to his failure to register

the worker.

2. Where the establishments that take the initiative to apply for registration,

and they and their workers have accordingly become covered for the first time

and it has been discovered that both the establishments and their workers

should be retroactively covered, they may be exempted from all or part of the

additions for delay in accordance with the provisions of Article (30) of these

Regulations.

d. A period recorded on retroactive basis shall remain pending until thecontributions and fines are paid in full subject to the maximum limit, provided

that payment is made within three monts from the date of notification of the

employer and the insured person of the due amounts. The Governor of the

Organization may, for justifiable reasons, extend the time limit by such period

and he may deem appropiate. the Organization shall have the right to claim

full payment of the due fines for delay in the event of failure to pay the same

within the prescribed time limit (1).

2. The provisions of the preceding paragraphs shall not prejudice the

Organization's right to impose the penalties provided for in Article (62) of the

Law on the employer who violates the provisions of the Law and Regulations

thereof by his failure to record the full period of employment or register the

worker.

3. The provisions of this Article shall take effect in respect of the compulsory

contributors and shall apply to all applications for the recording of

contribution period on retroactive basis which are produced to the

Organization Offices after the introduction of these Regulations or before the

introduction thereof but have not been decided on yet (2).


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CHAPTER III

RULES FOR ASSESSMENT OF CONTRIBUTIONS

ARTICLE (16)

The earnings which shall be subject to deduction of contributions provided for

in Article (18) of the Law shall be those amounts received by the insured

worker for his work, provided that such amounts are included in the following

categories and are not exceeding the sum of SR 45,000 (forty five thousand

Saudi Riyals) per month:

a. The basic wage provided for in paragraph (9) of Article (1) of these

Regulations whether paid monthly, weekly, daily or by piece or according to

number of work hours or amount of production.

b. Housing allowance paid in cash according to the amount agreed to between

the employer and the insured person.

c. Housing of which the contributory value shall be equivalent to a two-month

basic salary. As an exception to this provision, the housing shall be exempted

from contributory deductions in such cases as may be determined by the

Governor.

ARTICLE (17)

For the purposes of computation of the monthly wage of the daily-paid insuredperson, the daily wage shall be multiplied by 30, and the product so obtained

shall be the monthly wage which is subject to contributory deduction.

ARTICLE (18)

1. The monthly wage of the insured person who receives his wage on a piece-

work basis, or as percentage of the sales value or on production amount basis

shall be deemed to be the monthly average of the wages he received for his

actual period of work in the preceding year.

The contributory wage of a newly-engaged insured person shall be the averagewage of a similar insured person in the same establishment.

2. The monthly wage of the insured person who receives his wage on an

hourly basis shall be computed on the grounds that every 240 paid hours are

equivalent to one month.

ARTICLE (19)

1. The monthly contribution payable in respect of any insured person shall not

be less than the contribution payable in respect of another insured person

receiving a monthly wage of SR 400. If the actual wage would otherwise beless, the contributions payable by the employer and the insured person shall be


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computed on the basis of the said wage base. The effect of this provision shall

involve only the assessment of contribution to the Social Insurance Scheme.

2. The provision of the preceding paragraph shall also apply to the apprentice

covarad by the Scheme, and if he is an unpaid apprentice, the employer shall

be liable to pay both the insureds and employer's shares of the contribution.

3. The state and semi-state bodies shall be excepted from the application of the

provisions of the two preceding paragraphs.

ARTICLE (20)

Where an insured person works for more than one employer, each of such

employers shall pay separately for the insured the contributions payable under

the Law on the basis of the contributory wage he pays to the insured, provided

that the total contributory wages paid by all his employers shall not exceed SR

45,000 (forty five thousand Saudi Riyals) per month, otherwise thecontributory wage paid by each such employers shall be reduced on pro-rata

basis, and the Governor shall determine the details required for the application

of this provision.

ARTICLE (21)

1. contributions shall be deductible from the amounts forming the contributory

wage provided for in Article (16) of these Regulations prior to making any

other deductions for taxes, fees, debts, installments or for disciplinary

penalties, fines, hours of lateness or days of absence without pay, or the like.

2 (a) Contributions payable by the employer and deductible from the insureds

wages during the year shall be paid in full on the basis of the whole

contributory wage agreed upon and received in the month of Moharram or

January of each year, subject to the calendar adopted by the employer,

notwithstanding that the contract of employment may be suspended or that his

wage may be insufficient for payment of the insureds share of contribution, in

which case the insureds share duly paid by the employer shall be regarded as

a loan which shall be settled in accordance with the provisions of the Labour

Law.

2 (b) The contributions payable in respect of the insured persons who enter

employment during the year shall be collected on the basis of the full

contributory wage for the month of their entry into employment until the end

of the insurance year, and they shall thereafter be treated on the basis

provided for in the preceding paragraph.

3. The contributions for the month of entry into employment shall be collected

on the basis of a complete month, but no contributions shall be collected for

any part of the month in which the employment is terminated unless it is

terminated at the end of the last day of the month. However, if the

employment is terminated in the same month of entry into employment, thecontributions shall be collected for the said whole month.


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4. For the purposes of application of the provisions of paragraph 2(a) of this

Article, contributions shall continue to be payable in the following cases:

a. In case an insured person in an establishment covered under the Law is

loaned to another establishment uncovered under the Law and his contractualrelationship with the first establishment still exists, the first establishment shall

continue to complete the respective insurance forms and to pay to the

Organization the contributions including the insureds share and may arrange

with the second establishment for the reimbursement of the amounts so paid.

However, if the insured is loaned to a covered establishment, such

establishment shall apply the Law to the insured as if he is one of its own

insured workers.

b. In cases of leaves of all kinds permissible under the Labour Law or

employer's own regulations.

c. In cases of unpaid days of absence permitted by the employer.

d. In case of leave taken by the Saudi insured person who is on scholarship

outside the Kingdom, for the purposes of payment of contributions for the

Annuities Branch.

ARTICLE (22)

In exception of the provisions of Article (21), the Governor may permit

assessment and payment of contributions on the basis of the actual

contributory wages received by the insured persons where he considers that

the adoption of this method is more convenient and easy for the employers.

ARTICLE (23)

In calculating and paying the due contributions, the employer shall pay the

actual amount of contributions in full including the fraction of the Riyal.

ARTICLE (24)

1. For the purposes of application of the provisions of Article 19(2) of the

Law, the raise in the contributory wage recorded for the compulsorily covered

person at the beginning of each insurance year shall not exceed 10% of his

wage recorded for the previous insurance year. This provision shall be

applicable with effect from the first insurance year immediately following his

fiftieth anniversary or from the date on which he attains such age if it happens

to be the first day of the insurance year, and it shall continue to apply until his

membership in the Scheme is terminated. The wage increase exceeding the

said percentage shall not be subject to contributory deduction.

2. In exception of the provisions of the preceding paragraph, the wageincrease exceeding 10% for workers covered under both the Annities and


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Occupational Hazards shall be recorded in the cases and within the limits

shown hereunder :

a. In case of the increase in the wages of the insured persons employed in state

and semi-state bodies.

b. In case of the increase in the contributory wages specified by the employer

for the worker who has resumed employment and has had previous

contribution period for which he has received lower contributory wages, so

long as the new wage specified by the employer is SR 1,500 of less (1).

c. If the wage so specified by the employer exceeds SR 1,500 and is 10%

higher than the last contributory wage received by the worker for his previous

employment, a compounded percentage of 4% of the wage per year for his

previous employment shall be added to his current wage as a prescribed

increase multiplied by the number of the whole years falling between the date

of leaving previous employment and the date of re-employment. Accordingly,the wage that shall be recorded for the worker shall be the resultant wage

(including the presumed increase) or the wage for his previous employment

plus 10% whichever is greater, provided that the recorded wage shall not

exceed the wage specified by the last empolyer (2).

3. The new wage of a worker who resumes membership shall only be

accepted for the worker who is covered under the Occupational Hazards

Branch (3).

ARTICLE (25)

1. The age of the insured person shall be recorded at the time of his initial

registration in accordance with the provisions of the first paragraph of Article

(48) of the Law, and such age may not be amended after it is recorded,

notwithstanding that other documents showing a different age may appear

later.

2. In exception of the provisions of the preceding paragraph, the insureds age

recorded upon his initial registration with the Organization may be amended in

the following two cases:

a. If the amendment is made only for the correction of material errors

committed upon recording the age of the insured at the time of his first

registration.

b. If the insured is registered before these Regulations are put into effect and

his age has not been recorded in accordance with the civil status identification

card, passport (for the non-Saudi covered under the Occupational Hazards

Branch) or decision of the appropriate Medical Board of the Organization.

3. In case the date of birth is not specified by day and month, the birth shall be

deemed to have taken place on the first day of the seventh month of therelevant Hijrah or Gregorian year, as per the calendar recorded.


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ARTICLE (26)

For the purposes of application of Article 18(1) of the Law, the rate of

contributions for the Occupational Hazards Branch shall be raised to the

double as a maximum in respect of employers who refuse to abide by theinstructions issued by the Organization or the other appropriate authorities in

regard of the workers' safety and health, after such employers are warned and

a time limit is given for eliminating the violation, by means of a report to be

prepared by the appropriate authority determined by the Governor, with due

regard to the following:

1. The Governor shall, by decision to be made by him, set the raise in the rate

of contributions provided for in the preceding paragraph for the months in

which the employer continues to have violated the safety and health rules.

2. The revised contributions shall be collected for the whole month in whichthe report evidencing the non-compliance of the employer with the

occupational safety and health rules, has been prepared. Such contributions

shall remain valid until the causes of violations have been fully removed and

the said instructions are thoroughly observed, provided that contributions shall

not be collected for the month in which the said causes are removed.

3. The revised contributions shall, after the employer is so notified, have the

validity of the original contributions as to payment of and times and

procedures for payment of contributions and penalties for delay in payment.

4. The decision for removing the raise in contributions shall be issued by the

Governor.

ARTICLE (27)

1. The Occupational Hazards Branch shall discontinue to apply to the insured

parsons who are serving abroad on mission in favour of the employer and to

those who are permitted to go on scholarship abroad until the date of their

return. The employer shall no more pay the contributions for such workers

with effect from the beginning of the month immediately following the date of

their travel, but he shall resume payment of contributions with effect from thebeginning of the month of their return to the Kingdom.

2. The following workers shall be excepted from the application of the

provisions of the preceding paragraph:

a. The crews of the Saudi aircrafts : They shall continue to be covered under

the Occupational Hazards Branch during their work on board of the aircrafts

or during their trip from the airport to their dwelling or vice versa in the

countries abroad to which such flights reach.

b. The crews of the Saudi land and sea means of transportation: They shallcontinue to be covered under the Occupational Hazards Branch during the


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international trips abroad in accordance with such controls as may be set by

the Governor.

ARTICLE (28)

The rectification of the contributory wages taken as a basis for the payment ofcontributions to the Organization may not be considered, unless the

application for rectification is submitted during the insurance year in which

the contribution has been paid or during the first three months of the

subsequent year at the most. In exception of this provision, the Governor may

consider the amendment of such wages in case the Organization discovers that

the employer has not fixed the contributory wages in the legal way.

In all cases, the contributory wage may not be rectified after the insured

parson sustains an employment injury.

ARTICLE (29)

Where it is discovered that a worker of the excepted categories provided for in

paragraph (3) of Article (2) of these Regulations has been registered or a non-

Saudi worker has been insured under the Annuities Branch thereby violating

the provisions of the Social Insurance Law, or that the registration has

involved any violation, the relevant period of contribution so registered shall

be annulled and the amount of contributions shall be refunded and the

membership for such period shall be considered as non-existing, with due

regard to the provisions of Article (64) of these Regulations (1).

ARTICLE (30)

1. The fines for delay provided for in paragraph (5) of Article (19) of the Law

shall no more be raised once they represent 100% of the contributions on

which payment of such fines are payable.

2. The Governor may exempt the employer who is cooperative with the

Organization from all fines for delay for justifiable reasons if the period of

delay is not more than ten days.

3. Without prejudice to the provisions of the preceding two paragraphs, theGovernor may, at his own judgment, exempt the cooperative employer from

payment of the fines for delay to the extent of 50% thereof and an exemption

at a higher rate shall be subject to a decision to be issued by the Board of

Directors on the recommendation of the Governor.

ARTICLE (31)

Without prejudice to the provisions of Article (62) of the Law and Article (15)

of the Regulations, where it is established that the employer has deducted the

contributions from the wages of his workers and failed to pay them to the

Organization, he shall be liable to pay them in addition to his lawfullyprescribed share and to register the workers whose wages have been subject to


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deductions so long as they satisfy the conditions for coverage under the

Scheme. However, where it is established that workers from whose wages

contributions have been deducted do not meet the coverage conditions, the

employer shall be notified of the non-acceptance of their registration and

requested to repay the workers their wage deductions.


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CHAPTER IV

PROCEDURES FOR COLLECTION OF CONTRIBUTIONS

ARTICLE (32)

Contributions, fines and other amounts due to the Organization shall be paid to

the Organization by cheques payable at accredited banks operating within the

jurisdiction of the appropriate office of the Organization, or by such other

means as may be determined by the Governor. The payment cheque or

voucher shall be associated with the forms provided for in Article (3) of these

Regulations and such other forms as may be determined by the Organization.

ARTICLE (33)

1. Without prejudice to the provisions of paragraph (3) of Article (45) of these

Regulations, contributions shall be paid within the first fifteen days of the

month immediately following the month for which such contributions are due.

2. Without prejudice to the provisions of Article (32) of these Regulations, the

date of payment shall be deemed to be:

- the date of cash payment to the office of the Organization;

- the date of delivery of the payment cheque to the office of the Organization

(in case of direct delivery);

- the date of the registered envelope or packet containing the payment cheque

if sent by post. However, where such date is unclear, the employer shall be

deemed to have paid the contributions five days earlier than the date on which

the said envelope or packet is received, unless the cheque is post-dated in

which case the date of payment of contributions shall be deemed to be the date

of the cheque;

- the date on which a deposit is made at the bank in favour of the Organization

or at such another places as may be specified by the Governor; or

- if the payment means approved by the Organization other than the foregoing

is adopted, the Governor shall determine the method of establishing the

relevant date of payment.

3. Nevertheless, if any of the last five days of the payment time-limit happens

to be an official holiday, the due date for payment of contributions shall be

extended to an equivalent number of days up to a maximum of five days.

ARTICLE (34)


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Failure to submit the forms within the relevant prescribed time limits shall be

considered as one of the cases that permits the Organization to impose the

penalties provided for in Article (62) of the Law.

ARTICLE (35)

The Organization shall furnish the employer with a periodical statement of

account showing the total contributions due from him according to the

information submitted by him and the total amount paid by him during the

period covered by the said statement of account, without prejudice to the right

of the Organization to claim any contributions or other amounts falling due in

consequence of any data or information that was not available to the

Organization at the time of preparing the statement of account.

ARTICLE (36)

1. Amounts due to the Organization shall be deemed to be payableimmediately they become due under the provisions of the Law, and the

employer shall pay such amounts plus the fines for delay due for the period of

delay up to the actual payment thereof in accordance with the provisions of

paragraph (5) of Article 19 of the Law and Article (30) of these Regulations,

otherwise the Organization may, by the Governor's approval, take the

measures for issuance of a court order for attachment and compulsory

execution on the funds of the employer after giving him a notice to this effect

and a grace period of fifteen days for the payment of contributions and fines

for delay. The Organization shall thereafter, as it deems appropriate, effect

such measures, if such payments are not made within the said time limit or

otherwise give him such further grace period as it may determine in the light

of the employer's circumstances and readiness to respond to the provisions of

the Law.

ARTICLE (37)

1. With due regard to the provisions of paragraph (3) of Article (63) of these

Regulations the employer's appeal shall not interrupt the grace period he is

given for payment under paragraph (5) of Article (19) of the Law. In the event

that he wishes to suspend application of the fines for delay, he shall pay on

account all amounts claimed. If his appeal is accepted, such payments shall berefunded to him and if it is not accepted, he shall be deemed to have paid his

dues within the limits of the payment he has already made.

2. The measures for attachments and compulsory execution shall be taken

through the official authorities after obtaining a court order for compulsory

execution on funds owned by or due to the employer from any government or

non-government agency, or individual.

ARTICLE (38)


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Without prejudice to the provisions of paragraph (6) of Article (62) of the

Law, neither contributions due to the Organization nor fines for delay shall be

waived by lapse of time for any reason whatsoever.

ARTICLE (39)

1. The amounts due to the Organization shall not be forfeited by the death of

employer; and his heirs shall be jointly liable to pay such amounts, each within

the limits of his inherited share.

2. Nor shall such amounts, be forfeited by dissolution, liquidation or merger of

the establishment with another establishment, or by division or by ownership

transfer by will, sale or relinquishment or by conversion to another legal form

or by any other action. Both the old and the new employers shall be jointly

liable to pay all the amounts falling due to the Organization before any of the

aforementioned actions takes place; but any amounts falling due thereafter

shall solely be payable by the new employer.

ARTICLE (40)

1. The Organization may, when necessary, accept payment of the amounts due

from the employer by installments over such period as may be determined by

the Governor, provided always that either:

(a) the amounts due to the Organization are secured against the employer's

fixed assets, being sufficient to cover the said amounts, and the employer shall

be precluded from disposing of such assets by sale or any other means

whereby ownership may be transferred before the said amounts are paid in

full, unless the Organization gives its prior approval, or

(b) the employer provides an unconditional guarantee from an accredited bank

valid for the whole period of payment by installments.

2. The Governor may exempt the employer from the condition for providing

the securities referred to above.

ARTICLE (41)

1. For the purposes of determining the amount to be paid by installment,

payment shall include:

(a) the contributions due from the employer not paid by him as of the date of

issue of the decision for installments;

(b) the fine for delay due in respect of the contributions not paid as of the date

of issue of the said decision; and

(c) the fines for delay in payment of each installment until it is paid in full,

provided that the total amount of such fines plus the fine provided for in the


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preceding paragraph (b) shall not exceed 100% of the amount of contributions

provided for in paragraph (a) above.

2. The Governor may exempt from payment of fines imposed on installments

and may also exempt from payment of all or part of such fines as may be

exempted by virtue of the provisions of Article (30) of these Regulations,without prejudice to the Organization's right to cancel the decision for

installment in the cases provided for in the next Article (42). The exemption

from all or part of fines for delay is pending payment of all installments, and a

provision to this effect shall be set out in the decision for installment.

ARTICLE (42)

The issue of a decision to accept payment by installments shall not prejudice

the right of the employer to settle the amounts due from him in one payment

or to pay the remaining installments before the relevant due times. The

Organization may cancel the decision for installment if:

a. the Organization considers that the reasons justifying the decision have

ceased to exist; or

b. the employer fails to pay the due amounts in the due times; or

c. the employer fails to pay new monthly contributions in the due times; or

d. the establishment undergoes such a change as may expose the Organization

to loss of the amounts due, for example:

- bankruptcy;

- liquidation or discontinuation of activity;

- emigration or permanent departure from the country; or

- enforced sale of the employer's assets which is effected at the request of any

creditor, whether such enforcement is administrative or judical; or

- the employer's death, in case of private establishment.

The said cancellation shall be effected by a decision to be issued by the

Governor, and all amounts then due to the Organization shall consequently be

payable within one month from the date of notifying the employer of the said

cancellation decision. In case payment is not made within the said time limit,

the Organization shall have the right to claim the value of the guarantee or to

take measures to secure compliance by administrative seizure, with due regard

to the provisions of Article (36) of these Regulations.


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CHAPTER V

PROVISIONS CONCERNING VOLUNTARILY COVERED PERSONS

ARTICLE (43)The law shall apply to those who wish to have voluntary coverage by virtue of

the provisions of paragraph (4) of Article (4) of the Law in accordance with

the following rules and procedures:

1. Submission of the following documents:

a. Application for contribution on Form 7/Insurance prepared for this purpose.

b. Document showing his engagement in one of the activities provided for in

paragraph (4) of Article (4) of the Law, provided that such document shall be

issued by the appropriate authority, or a certificate issued by the Saudi

Consulate in the country of residence of the Saudi insured person .

c. Civil status identification card or family register.

2. With due regard to the provisions of paragraph (2) of Article (44) of these

Regulations, the voluntarily covered person shall select from the attached

Schedule No. (1) the income category he wishes to be taken as a basis for his

contribution, and his coverage shall take effect on and from the beginning of

the month immediately following the date of completion of the required

documents.

ARTICLE (44)

Without prejudice to the provisions of paragraph (1) of Article (45) of these

Regulations, any insured person whose compulsory coverage under the

Annuities Branch is discontinued may submit to the appropriate office an

application expressing his desire to continue his voluntary coverage under the

Scheme in accordance with the provisions of Article (8) of the Law for the

purpose of completing the contribution period qualifying for entitlement to

old-age pension or increasing his contribution period for improving his

pension, notwithstanding that his discontinuation of coverage may have takenplace prior to the implementation of these Regulations, subject to the

following rules and procedures:

1. a. The applicant for voluntary coverage may not request to repay the

compensation he has already recived except in the cases provided for in

paragraph (1) of Article (14) of the Annuities Branch Benefits Regulations.

b. For the purposes of accepting the application for coverage, the following

conditions shall be satisfied :

1. The application shall be submitted to the appropriate office on Form7/Insurance prepared for this purpose .


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2. The application shall be submitted within five years from the date of putting

these Regulations into effect for the insured person whose compulsory

contribution period has ended before the said date and within five years from

the ending date of the contribution period if it has ended after these

Regulations are put into effect (1).

2. The contribution shall be based on the income category elected by the

contributor from among the income categories contained in the Schedule No.

(1) attached hereto, provided that it shall not initially exceed the last

contributory wage he was receiving during his compulsory contribution by

more than 10%. If his previous wage plus the said percentage fall between

two categories, he may chose the higher one. Nevertheless, he may, upon his

initial voluntary contribution, elect any category higher than that one, in

which case the benefits he will eventually be entitled to shall be computed on

the grounds that his compulsory contribution period is considered as an

independent period as provided for in the Annuities Branch BenefitsRegulations.

3. The contribution shall start with effect from the first day of the month

immediately following the date of completing the required formalities and

documents.

4. The one to whom the provisions of Article (8) of the Law are applicable and

has missed the chance of applying for voluntary contribution within the time

limit provided for in paragraph ( 1.b.2 ) of this Article, may, at any time, apply

for voluntary contribution in accordance with the provisons of Article (43) of

these Regulations, so long as he fulfills the required conditions, with due

regard to the provisions of paragraph (2) of this Article .

ARTICLE (45)

The following provisions shall apply to all those who are voluntarily covered

in accordance with the provisions of paragraph (4) of Article (4) and Article

(8) of the Law:

1. With due regard to the provisions of Articles (43) and (44) of these

Regulations, the applicant for voluntary coverage shall meet the followingrequirements in order to accept his application:

a. He shall, at the time of submission of his application for membership, be at

age eighteen or over but under the age provided for in paragraph (2) of

Article (4) of the Law.

b. He shall successfully complete the medical examination determined by the

Governor.

2. The contribution year in respect of the voluntarily covered person shall be

the Hijrah calendar year which starts at the beginning of the month ofMoharram and ends at the end of the month of Zul-Hijjah, or the Gregorian


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calendar year which starts at the beginning of the month of January and ends

at the end of the month of December as opted by the insured person who may

not change his option.

3. The insured person or the one who acts on his behalf shall pay the

contribution due for each month in advance within fifteen days of each month.The Governor may accept advance payment of contributions for any period as

he may deem appropriate and in accordance with such procedures,

arrangements and conditions as he may determine for individual or collective

cases, without prejudice to the requirement of expiration of the period for

which contributions have been paid until the commencement of the lawfully

due date of payment of benefits, as if the contribution has been made on

monthly basis.

4. The insured person may designate the name or names and specimen

signatures of the representatives who act on his behalf for the purposes of

application of the provisions of the Law and these Regulations particularly forsubmission of documents, completion of forms, and reporting the events

required to qualify to benefits. Any actions taken through any of such

representatives shall be deemed as binding to the insured person. The insured

may replace such representatives any time after giving the Organization a

notice to this effect. If he does not designate any representative to act on his

behalf to do so, he shall be liable to deal with the Organization by himself.

5. The insured person may apply for changing his current contributory income

category to the immediately higher one, provided that he submits his

application for the change begore the beginning of the insurance year. The

same shall apply to the one who submits his application within the first fifteen

days of the first month of the said year. If he fails to do so within time limit,

the change shall take effect in accordance with the new category from the

beginning of the insurance year immediately following the date of submission

of the application .

6. The insured person may apply for changing his current contributory income

category to a lower one, provided that he submits his application before the

beginning of the insurance year. The same shall apply to the one who submits

his application within the first fifteen days of the first month of the said year.

If he fails to do so within this time limit, the change shall take effect inaccordance with the new category from the beginning of the insurance year

immediately following the date of submission of the application. In this case,

the insured person shall be treated the same as the complusorily covered

person whose contributory wage is reduced in accordance with the provisions

of the Annuities Branch Benefits Regulations.

7. The insureds membership shall, upon his request, be discontinued with

effect from the last month for which he has paid or will pay contributions and

shall also be considered as discontinued, in the event of his actual suspension

of payment of contributions, with effect from the end of the last month for

which he has paid contributions.


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8. If an activity on which basis a voluntarily covered person has been

registered is discontinued, his contribution shall be terminated at the end of the

month in which his activity is discontinued or at the end of the last month for

which contributions have been paid if his activity has already been

discontiuned. However, if it is discovered that he has continued payment of

contributions beyond the date of discontinuation of the activity, thecontributions paid for the months following the said date shall be refunded to

him .

9. The insured person whose coverage is suspended may resume coverage for

the purpose of completing the period qualifying for pension or increasing such

period, in which case he may pay the contributions and fines for delay due for

the suspended period or otherwise forfeit such period. Coverage shall be

resumed and the contributions payable for the suspended period shall be

computed on the basis of his last contributory income category, and a fresh

application shall be submitted by using the form prepared for this purpose.

10. Failure to pay contributions for any reason shall not have effect on the

lawful time of entitlement to benefits.

11. If the applicant for voluntary coverage employs workers, his application

for voluntary coverage shall not be accepted unless he registers his

establishment and all his workers and pays the contributions due in respect of

such workers so long as they fulfill the conditions of compulsory coverage

under the Scheme as required by the phases of application.

12. The voluntarily covered person shall be subject to all provisions of these

Regulations that have no contradiction with his status as voluntary coverage,

in accordance with such details and procedures as may be set by the Governor.


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CHAPTE VI

CONTROL OF APPLICATION OF THE LAW

SECTION 1

GENERAL OBJECTIVES

ARTICLE (46)

1. The Organization shall take such measures as may be necessary for ensuring the

proper application of the provisions of the Law and its implementing regulations,

in particular:

a. To follow up the employers and assist them to properly apply the provisions of

the Law and its regulations to ensure, in particular, that they contribute for all their

workers on the basis of their actual wages and that they discharge their obligations

towards the Organization in accordance with the provisions of the Law and thedecisions of implementation thereof, and this includes the continuous survey of

establishments and verification of the registration of such establishments with the

offices of the Organization.

b. To follow up the employers who fail to pay the contributions or to submit the

forms after the necessary actions are taken by the competent agencies of the

Organization.

c. To explain the provisions of the Law and its implementing regulations to the

registered employers to avoid application errors and to ensure speedy discovery

of committed violations.

d. To ensure that each establishment is maintaining regular records and files to

serve the objectives of insurance in accordance with the decisions implementing

the Law.

e. To verify the employer's violations of the provisions of the Law and the

decisions issued in implementation thereof and to investigate such violations and

the workers' complaints concerning the employer's failure to register the workers

or his payment of contributions on the basis of wages lower than the actual ones.

f. To coordinate between the appropriate organs of the Organization and those of

the state bodies for the purpose of proper application of the Law, to exchange

information pertaining to the new establishments to follow up those with late or

discontinued payment, and to check whether the employer is abiding by the

occupational health and safety instructions issued by the appropriate authorities.2. The Governor shall, by decision to be issued by him, specify the departments

and sections assigned to achieve the objectives and tasks set under the preceding

paragraphs for each the head office and offices of the Organization as well as their

individual functions and work procedures.

SECTION 2

THE INSPECTORS AND THEIR AUTHORITIES

ARTICLE (47)


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1. The social insurance inspectors shall be charged with the achievement of the

objectives provided for in Article (46) of these Regulations in accordance with

such organization, plans and instructions as may be approved by the Organization.

2. The social insurance inspectors shall be elected from among the Organization

employees who have been employed for not less than two years in the

departments of the Head Office or the inspection work-related sections of theoffices to the extent that renders them thoroughly acknowledgeable of the Law

and its Regulations. Due regard shall be given to the following in the selection of

inspectors:

a. They should be exclusively impartial.

b. They should not have any direct interest in the establishments being inspected

by them.

c. They should have showed efficiency in the performance of their duties at the

Organization.

3. The inspection works shall be entrusted to a selected inspector by temporary

assignment for two months after which a comprehensive report shall be prepared

on him. This report shall be used for evaluation of his personal characteristics,behaviour, capabilities and aptitude for the proper performance of the inspector's

assigned tasks, prior to his permanent placement in the position of inspector.

4. Prior to starting performance of their tasks, the insurance inspectors and their

superiors shall take before the Governor the following oath:

" I swear by God the Almighty that I will carry out my post duties with honesty

and dedication and will not disclose the secrets which come to my knowledge in

the course of performance of my duties to any one other than the competent

agencies of the Organization. "

5. The Organization shall furnish each inspector with an identification card to

evidence his capacity and authorities, which card shall show his photograph, the

Governor's signature, the official seal, and the period of its validity as determined

by the Governor. The inspector shall return such card on quitting his job or being

transferred to do a job other than inspection. The inspector shall not be permitted

to use such card on assignments other than the official inspection ones. In case

an inspector loses his card, he shall be provided with a new one after it is

ascertained that he is free from the responsibility for the loss thereof.

6. The inspector may not be transferred to do another job after taking the oath

except for justifying reasons and by the Governor's approval.

ARTICLE (48)

The social insurance inspectors shall exercise the following powers:1. To enter the premises of the establishment during the working hours for the

purpose of carrying out their assignments.

2. To examine the records, papers and files or any other documents kept by the

employer in respect of the application of the Law and its Regulations to the

workers and to obtain copies of such documents if required.

3. To question the employer, his representative or his workers on any subject

relating to his mission and may write a report thereon, if necessary.

4. With due regard to the provisions of paragraph (2) of Article 60 of the Law, the

inspector may not request the assistance of any of the appropriate authorities of

the Government without the Governor's approval.

ARTICLE (49)


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In doing their jobs, the inspectors shall observe the following:

1. To be cautious and honest in choosing the information and statements they

include in their reports concerning the establishments they have inspected. In

particular, they shall base their observations on what they themselves hear or

witness. They shall refrain completely from making any comments on matterswhich they are not adequately acquainted with in order to maintain the confidence

which has been placed in them.

2. To carry, upon performing their duties, the identification card which evidences

their capacities and to present it when needed.

3. To meet the employer or his representative before entry into the business

premises to perform inspection, unless they feel that the public interest

necessitates that they proceed performing their inspection assignment immediately

upon their arrival. In no way, a prior notification of an inspector's visit be made

unless such prior notification is deemed to meet the work interest.

4. To give full care to the guidance and advisory aspect in their relationship with

the employers and provide every possible aid with a view to assist them inapplying the Law and implemental measures thereof in the manner contemplated

by the Organization and to overcome any difficulties in this respect.

5. To choose, for the inspection visits, the convenient time, subject to the nature of

activity of the establishment.

SECTION 3

INSPECTION RULES AND PROCEDURES - REPORTS

ARTICLE (50)

The inspection agencies shall observe the following:

1. The inspection visits plans shall include a field inspection of every coveredestablishment at least once every periodical interval determined by the Governor,

or upon applying by the establishment for a certificate from the Organization if a

certain period, to be determined by the Governor, has elapsed since the last

inspection was performed, subject to the purpose of the required certificate.

2. The periodical inspection shall cover all aspects concerning the application of

the Law and these Regulations and, in particular, the verification of registration of

all workers with their actual wages.

3. The competent superior at each office shall organize the inspector's visits to the

establishments during the official working hours in accordance with programs

certified by the office director and prepared on special form approved by the

Governor.

ARTICLE (51)

1. Each inspector shall prepare on the relevant form approved by the Governor a

full report on the results of each inspection he conducts in respect of any

establishment he visits for the purpose of making periodical inspection or ensuring

compliance. The report shall be submitted to his immediate superior for review

and comments. The report shall, in particular, include the following information.

a. Administrative data which includes:

Inspector's name, date and time of inspector's visit, and names of the persons he

has met.b. Identification of the establishment he has visited, which includes:


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- Name, legal form, type of activity and registration number of the

establishment.

- Its address.

- Name of the proprietor or responsible manager.

- Nature of work.

- Number of Saudi and foreign workers in employment.c. Summary of the results of the visit.

d. Recommendations.

e. Such other information as the Governor may recommend to be included in the

report.

2. The Office Director may accept the inspection visit made by an inspector

although it has not been included in the already approved inspection visit

programme, provided that the inspector shall have shown evidence of the visit

event by means of a report signed by him and the establishment proprietor or

responsible manager.

ARTICLE (52)

1. Where an inspector discovers that an employer has committed violations in

discharging his obligations under the provisions of the Law and these Regulations,

he shall clarify verbally to the employer or his representative the nature of the

violation, the legal judgment in respect of the violation, and the procedures and

the grace period for eliminating the violation and shall confirm the same by a

letter to be sent to the employer by official mail. If the employer fails to respond

within the grace period, he shall be given an official warning duly certified by the

Office Director, and such warning shall contain a statement of the violations and

the procedures which shall be taken to eliminate the violations and shall indicate

an adequate period determined by the Office Director for the elimination of each

violation according to its nature, provided that it shall not exceed one month. The

Office Director may extend the said grace period for further one month

maximum, if he discovers that the employer is ready to respond. He may, in lieu

of serving the said warning letter, provide the employer with a copy of the

inspector's report referred to in Article (51) if it suffices the purpose, with the

grace period granted to him for elimination of the violation specified in the report.

The granting of the grace period specified in the warning shall not prejudice the

Governor's right to apply the penalties imposed by the Law without waiting until

the expiry of the grace period for such reasons as may be determined by theGovernor if this would maintain the entitlements of the Organization.

2. With due regard to the provisions of Article (53) of these Regulations, if the

employer fails to eliminate the violation within the prescribed grace period in

accordance with the provisions of the preceding paragraph, the inspector shall

draw a report of contraventions in triplicate of which a copy shall be sent by

official mail to the employer, provided that the report shall contain the basic

information, in particular:

a. the position of the violator, being either the employer or the person-in-charge of

the conduct of his

Documents

Social Insurance Law - Implementing Regulation