On Sunday, The Kingdom’s Finance Minister Mohammed Al-Jadaan warned painful but necessary cuts were coming.
Now, reports widely shared but not confirmed by cabinet suggest that private-sector employers will soon be permitted to reduce salaries by 40%.
The directive also refers to terminations; the reduction of salaries by 40% must be in place for a period of six months before employers are permitted to terminate the employee’s contract.
Terminations will only be allowed under the following conditions
- The employee has the right to work for six months before they can be laid off
- Annual leave, exceptional leave and pay reduction have all been used
- The employer must prove it is in financial difficulties