Major Social Security Reform Extends Benefits To Expats

• Published date: 29 August 2023
• Subject Matter: Employment and HR, Retirement, Superannuation & Pensions, Health & Safety
• Law Firm: WTW
• Author: Steve Clements

Oman becomes the first Gulf Cooperation Council state to extend maternity leave, work injury sickness leave and end-of-service benefits to foreign workers, among other sweeping changes.

Employer Action Code: Act

Royal Decree No. 52/2023, Promulgating the Social Protection Law, brings comprehensive changes to Oman's social security system, including reforming existing retirement benefits for Omani workers to improve the system's sustainability, establishing minimum social protection benefits and extending certain benefits (e.g., maternity leave, work injury coverage) to foreign workers. As of mid-2023, foreign workers make up over 75% of the total workforce.

Key details

• Retirement benefits: Increase normal retirement age (currently age 60 for men and age 55 for women) by one year every seven years until reaching age 65 for men and age 60 for women; tighten early retirement eligibility and reduce benefits; scale back the defined benefit accrual formula; and increase employer and employee contributions by 0.5% of covered pay each. The changes are effective upon publication of the decree ' except for the increase in contributions, which will be effective January 1 2024.
• Maternity and paternity leave (from July 2024): Extend eligibility for paid maternity leave to foreign workers, lengthen the leave duration from 49 to 98 calendar days and establish a new paternity leave entitlement of seven calendar days at 100% of pay for all employees. Benefits will be paid by social security (rather than being employer-paid as is currently the case for maternity leave). Employers will be subject to a new social security contribution of 1.0% of covered pay to finance the benefits.
• Sickness and other leaves (from July 2025): Extend eligibility to foreign workers and modify the current entitlement so that up to 182 calendar days of sick leave are available. The first seven will be paid by the employer at 100% of pay, with the remainder paid by social security at 100% for days eight to 21, 75% for days 22 to 35, 50% for days 36 to 70, and 35% for days 71 to 182. Currently sick leave is...