Labour Law Update: Increase in Minimum Wage

As mentioned in our post of April 2013, the Ministry of Manpower issued a MD No. 222 of 2013, pursuant to which, effective from 1 July 2013, the minimum salary of Omanis working in the private sector is increased to RO 325 from the existing minimum salary level of RO 200. The salary of RO 325 shall be comprised of RO 225 towards basic salary and RO 100 as allowance.

Accordingly, private sector establishments have been asked to increase the minimum salary level of those Omani employees which are currently being paid less than RO 325. Further, the Omani employees in private sector establishments will continue to be entitled to any other increments as per the internal work regulations formed and approved by the Ministry of Manpower pursuant to Article 28 of RD 35 of 2003.

It is also important to note here that as per MD No. 32/2012, the Ministry of Manpower has mandated that effective from 30 January 2012, all private sector employees (who have been working with the particular employer for at least six months as of 1 January of such year) shall be entitled to a salary increase of at least 3% every year unless the employee has been underperforming. Therefore, the minimum salary level effective from 1 July 2013 will witness an increase of at least 3% every year, unless the employee does not meet the criteria for annual increment.

The raise in salary levels is aimed at encouraging more and more Omani nationals to join private sector establishments and is said to benefit over 60% of Omani nationals. The increase is also aimed at bringing parity between the salary levels of national and expatriate employees. The Council of Ministers has urged all private sector departments to cooperate in order to facilitate all measures of their decision.