GMS Flash Alert 2025-024

Oman – Ministry of Labour Updates Wage Protection System

GMS Flash Alert 2025-024 | 28 January 2025

On 15 December 2024, Oman’s Ministry of Labour (MOL) issued Ministerial Decision No. 729/2024,1 (the Decision), introducing updates to the Wage Protection System (WPS) in accordance with the labour law issued by Royal Decree No. 53/20232.  The Decision further safeguards employee wages and promotes financial transparency within the private sector.  Key updates include the following: implementation of a reduced timeline for wage payments to employees; payments must be made to a bank or financial institution regulated by the Central Bank of Oman; additional exemptions to the WPS; and increased scrutiny from the MOL.

Key provisions of the Decision are detailed below and came into force on 16 December 2024, the day after the publication in the Official Gazette.

The Decision revokes Ministerial Decision No. 299/20233 and any conflicting provisions. 

WHY THIS MATTERS

The Decision could mean adjusted procedures for employers and will entail enhanced vigilance by the Omani authorities.

Employers could be liable to penalties or other consequences as determined by the MOL if found to be non-compliant.

More Details 

The key provisions of the Decision are as follows:

Monitoring wage payments: The WPS aims to monitor the payment of wages to workers in the private sector electronically, so that employers transfer wages to their workers’ accounts at banks or financial institutions regulated by the Central Bank of Oman, as agreed in the employment contract within the legally-prescribed period.

Employment contract updates: Employers must update employment contracts in the event of any changes to workers’ wages.  The updated contract must reflect the worker’s actual wage.

Transfer of wages: Employers are required to transfer workers’ wages via the WPS to a bank or financial institution regulated by the Central Bank of Oman within no more than three days from the end of the wage entitlement period.

MOL to oversee implementation: A designated division within the MOL will monitor the WPS’s implementation and create a database.

Exemptions: Some employers are exempt from using the WPS in specific cases such as:

  • Labour disputes resulting in work cessation for over 30 days.
  • Suspension of work due to reasons unrelated to the employer for over 30 days.
  • Absconding reports filed with over 30 days’ approval lapse.
  • Newly-hired workers who have not completed 30 days of employment.
  • Workers on unpaid leave.

Applications for other exemptions: Applications for exemptions not specified in point v above may be reviewed by a committee formed by the MOL.

Violations and penalties: To foster compliance, the MOL is empowered to issue penalties for violations of the Decision.  Employers may receive a warning, suspending the service of issuing preliminary work permits until violations are resolved, and fines of OMR 50 per worker may be applied with the penalty doubling if the violation is repeated.

KPMG INSIGHTS

Employers in Oman should consider the possible implications of the updates and foster proper compliance with the provisions of the Decision to avoid any penalties or other consequences.

Employers that are concerned about the WPS updates and what they mean for current procedures and policies and wish to consult on appropriate next steps should consider contacting their usual employment law advisers or a member of the global-mobility services team at KPMG in Oman (see the Contacts section).

KPMG in the Lower Gulf will monitor developments and endeavour to keep readers of GMS Flash Alert informed as developments occur.

Footnotes:

Ministry of Labour: Ministerial Decision 729/2024 regarding the Wage Protection System – DecreePlease note that by clicking on this link you are leaving the KPMG website for an external site (non-governmental, non-KPMG), that KPMG is not affiliated with nor does KPMG endorse its content.  The use of the external site and its content may be subject to the terms of use and/or privacy policies of its owner or operator.

Royal Decree 53/2023 Promulgating the Labour Law – Decree.  Please note that by clicking on this link you are leaving the KPMG website for an external site (non-governmental, non-KPMG), that KPMG is not affiliated with nor does KPMG endorse its content.  The use of the external site and its content may be subject to the terms of use and/or privacy policies of its owner or operator.

Ministry of Labour: Ministerial Decision 299/2023 regarding the Wage Protection System – Decree. Please note that by clicking on this link you are leaving the KPMG website for an external site (non-governmental, non-KPMG), that KPMG is not affiliated with nor does KPMG endorse its content.  The use of the external site and its content may be subject to the terms of use and/or privacy policies of its owner or operator.

Contacts

Pranav Shah

Director

KPMG in the United Arab Emirates

Hussein Al Lawati
Hussein Al Lawati

Associate Director, Tax

KPMG in Oman

Keelin Kane

Manager

KPMG in the United Arab Emirates

More information


Disclaimer

* Please note the KPMG International member firm in the United States does not provide immigration or labour law services. However, KPMG Law LLP in Canada can assist clients with U.S. immigration matters.

The information contained in this newsletter was submitted by the KPMG International member firm in Oman.

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