Unemployment Insurance Law in the Kingdom

The Unemployment Insurance Law in the Kingdom of Saudi Arabia refers to a set of rules, foundations, and principles governing the compensation of workers and their families after leaving their jobs, up until the date of joining other employment. The law is applied by the General Organization for Social Insurance (GOSI) in the Kingdom. The insurance law stipulates that for an unemployed person and his family to be entitled to compensation, the unemployment must be due to reasons beyond their control. The law and its implementing regulations were issued in 2014, and the regulations prescribe the calculation of unemployment compensation benefits.

The Unemployment Insurance Law promotes the principle of social solidarity by supporting unemployed persons and their families without discrimination. The insurance law applies only to Saudi workers under sixty years of age.

The compensation provided for in the law is equal to 60 percent of the average monthly wage covered by subscription for each month of the first three months and 50 percent of said average for each additional month. The average monthly wage is equal to one twenty-fourth of the total wages for the last twenty-four months of subscription.

The law stipulates the maximum amount of compensation is SAR9,000 for each of the first three months and SAR7,500 for each additional month. If the amount of stipulated compensation is less than the benefit paid to job seekers - under the law - it is increased to be equivalent to said amount, provided that the compensation does not exceed 100 percent of the average monthly wage subject to subscription.

The Unemployment Insurance Law applies to all Saudi workers without discrimination on the basis of gender, provided that the worker is under the age of fifty-nine at the time the law enters into force. A worker's subscription to the law is terminated upon reaching the age of sixty.

Employers must apply the law and the regulations. The implementation of the law and the regulations commences on the date the conditions provided for therein are satisfied. The regulations specify the manner of registration with GOSI for employers and subscribers covered by this law.

Support of the Unemployment Insurance Law is suspended in a number of cases, including: death; if the beneficiary has monthly income from employment; if the beneficiary is no longer able to work; if the beneficiary is no longer registered with the Ministry of Human Resources and Social Development; if the beneficiary no longer actively seek employment; if the beneficiary is not committed to training without an acceptable justification; if the beneficiary does not comply with the instructions and directives issued by the ministry; if the beneficiary leaves the Kingdom; and if the beneficiary reaches sixty years of age and is entitled to a pension under the Social Insurance Law.