Labor Law Update: New Ministerial Decision Requires Private-Sector Salary Increases

In a development of importance to private-sector employers and employees throughout the Sultanate, the Ministry of Manpower has recently issued Ministerial Decision No. 32/2012, which mandates annual salary increases for private-sector workers in Oman. MD No. 32/2012, which applies to all employees in the private-sector and became effective on 30 January 2012, entitles employees to a salary increase of at least 3% each year.

MD No. 32/2012 provides that, each year, every employee who has been working for his employer for at least six months as of January 1st of such year shall be entitled to receive an annual increase to his basic salary for such year equal to at least 3% of his previous year’s basic salary, with effect from January 1st of such year. However, employees who have been rated as underperforming in their annual appraisal for the previous year may not be eligible to receive such an annual salary increase for the new year. Please note that MD No. 32/2012 sets 3% as the minimum threshold for an employee’s annual salary increase, and is without prejudice to any terms more favourable to the employee stated in his employment contract.