Employment
Once a foreign investor has registered their foreign branch or incorporated a company with the Ministry of Commerce, Industry and Investment Promotion of Oman, obtained an office lease and municipality licence (if applicable), the foreign investor is required to employ an Omani public relations officer to handle subsequent registrations and approvals from the administrative bodies of Oman, which would include clearances and visas for the recruitment of foreign nationals (where applicable). The public relations officer will handle the process of obtaining approvals and clearances from the Ministry of Labour and the immigration authority, following which the employee can then be formally hired by the business.
In the case of employing both a foreign national and Omani national, an employment contract (which can be in English) should (depending on company policy) be entered into and a short, standard form employment contract (bilingual, English and Arabic) must also be filed with the Ministry of Labour to formally record the employment relationship. As a further step, the business must also register with and make social insurance contributions to the Public Authority for Social Insurance, in respect of employees that are Omani nationals.
Employers should be aware that certain roles have been Omanised, meaning that the law stipulates that those roles can be fulfilled only by Omani nationals. A visa will not be issued to a foreign national seeking to be placed into an Omanised role.
Oman continues to operate on a normal business week of Sunday to Thursday inclusive, with Friday and Saturday being the weekend. Banks also operate on a Sunday to Thursday working week. In accordance with Omani employment law, businesses work a maximum of 40 hours per week, based on a working day of 8 hours. During Ramadan, the working hours of muslim employees is reduced.
Employees are entitled to the following key rights and benefits(note, that this is not an exhaustive list)
30 days annual leave
Leave due to illness is capped at 182 days per year subject to the following:
100% gross salary paid for the first 21 days
75% gross salary paid between days 22 – 35
50% gross salary paid between days 36 – 70
25% gross salary paid between days 71 – 182
98 days of maternity leave
7 days of paternity leave
The law grants other types of leave to be taken by employees, such as marriage leave, study leave, religious leave and special time off for bereavements.
Employers must make social insurance payments for their employees that are Omani citizens. The total rate payable by companies is 17.5% of salary of which the employee pays 7% and the employer pays the balance. The payment is made on a monthly basis to the Public Authority for Social Insurance.
Expatriate employees are not entitled to social insurance payments. Instead, employers must pay an expatriate gratuity, which is the equivalent of one month’s worth of the expatriate’s basic salary for each year of service. Companies are expected to retain sufficient reserves to settle gratuity liabilities as and when they arise.
Limited term contracts are fixed and terminate at the end of their term.
Termination of an unlimited term employment contract must be made only with cause and for one of the reasons stated in the Omani employment law. In addition to the reasons stated in the law, the Omani employment law does, in certain circumstances and subject to the requirements in the law and approval of the Ministry of Labour, allow for termination of an employment contract if an employee does not meet performance levels required by the employer, where there is a partial closure of the business or reduction of the size of the business and for valid economic reasons.
Contracts can be of either unlimited duration or where the employee is being recruited for ad hoc or project specific work, specified to be of a limited duration in which case the maximum period that can be specified on a limited duration contract is 5 years.
