Article 13 of the Saudi GCC Insurance Protection Extension Law

This article sets out the penalties to which a violating employer is exposed.

The four violations:

1. Being late in paying contributions within the dates set by law.
2. Failing to register all or some of its employees or workers subject to the Law.
3. Failing to report the end of service of any of them.
4. Paying contributions on the basis of unreal wages.

The penalty: the penalties in force in the civil retirement or social insurance law of the state of the workplace apply. This article does not specify the amount of these penalties, so the law of the state of the workplace must be consulted.

To whom do the amounts go? The amounts arising from the application of this article are considered rights of the retirement or insurance body in the home state, and are deposited in the bank account designated for this purpose.

The article combines two laws: the law of the state of the workplace determines the penalty, and the body of the home state benefits from its proceeds. The employer is treated under the penalties it knows in its own country, while the amounts go to the body that insures the employee.

In practical terms, registering the GCC employee, declaring his true wage, reporting the end of his service and paying contributions on time are obligations whose breach carries a penalty. Article 12 deals with the procedures for collecting late contributions.

To apply this to a specific case, it is advisable to consult a lawyer who specializes in social insurance and retirement laws.