Oman: New Labor Law Overhauls Immigration System

November 21, 2024

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Country / Territory

At a Glance

  • The government of Oman issued a new labor law which is in immediate effect and replaces regulations originally issued in 2003.
  • The new law applies to all employers and employees, except those whose work is regulated by special law or regulations.
  • Notable changes include a reduction of minimum weekly working hours, new mandatory employment contract terms, new possible forms of employment, the ability to change employers, and new rules surrounding Omanization, among others.
  • The law is expected to promote transparency in workers’ rights while maintaining a balanced and beneficial employment relationship for both employers and employees.
  • Update - November 21, 2024: As anticipated, the Ministry of Labor has released implementing regulations with respect to this law. Although these regulations address various labor law issues (including worker rights, penalties and training) they do not contain any specific updates on immigration or mobility issues, alternative work models (for instance, remote or part-time work), or change-of-employer processes.

The Ministry of Labor (MOL) of Oman issued a new labor law which is in immediate effect. The new law applies to all employers and employees, except those whose work is regulated by special law or regulations.

The following are some notable changes:

 

CHANGE NEW LAW OLD LAW IMPACT
Reduced minimum weekly working hours and increased work leave
  • All employees can now only work 40 hours per week.
  • Additionally, paternity leave has been introduced and sick leave has been extended to 182 days and maternity leave has been extended to 98 days.
  • Previously, foreign nationals could work for up to 45 hours per week.
  • There was previously no paternity leave granted. Sick leave was only granted for up to 10 weeks and maternity leave was only granted for six weeks.
  • The shortened permitted number of hours worked will attract both foreign nationals and Omani nationals to the workforce.
  • The introduction of paternity leave and extension of maternal and sick leave will make Oman a more attractive place for foreign nationals to work and build families.
New mandatory employment contract terms
  • The new law sets out rules for terminating employment contracts, including in cases where an Omani national is available to replace a foreign worker in the same position.
  • It also requires that certain details be included in employment contracts, such as the duration of contract (set at a maximum of five years if the contract is for a limited term), the employee’s qualification and occupation, type of work and remuneration.
  • Previously, these rules were not defined within the labor law.
  • The changes are intended to provide transparency to foreign nationals’ rights while working in Oman.
New forms of employment
  • The new law introduces a remote work model, although details have not yet been released.
  • Remote work was not previously permitted under Oman’s labor laws.
  • Remote work will allow flexibility for foreign nationals in that they can work from anywhere in the country instead of specifically at an employer’s office, making working in Oman more attractive to individuals. This will create cost savings for employers as they will no longer need as much office space.
Ability to change employer
  • Foreign nationals will be able to change employers under the work permit under which they entered, provided that the new employer has obtained electronic authorization from the Ministry of Labor. Details on this process are expected to be forthcoming.
  • Previously, foreign nationals could not change employers in Oman; instead, they had to leave the country and apply for a new job and work permit in Oman.
  • This change will reduce the overall cost of recruitment as employers can hire foreign nationals already in Oman, saving on travel fees which are incurred when hiring foreign nationals abroad.
Stricter Omanization Rules
  • The Ministry of Labor will now determine professions and businesses in which foreign workers may be replaced by Omani nationals.
  • Additionally, companies with 25 employees or more will now be required to prepare specific training and recruitment plans while the Ministry of Labor will coordinate training programs for each economic sector, in collaboration with Oman’s chambers of commerce.
  • Smaller companies with 40 or more employees will have to hire Omanis with disabilities.
  • Previously, this rule was not codified in labor law, although the task was still performed by the Ministry of Labor.
  • Previously, there were no training and recruitment plan requirements.
  • Companies were only required to hire Omanis with disabilities if they had 50 or more employees.
  • This change could potentially create an increased risk of layoffs for foreign nationals as the number of Omani nationals with skills for certain positions will increase with the new training programs. It may also create uncertainty around employers’ Omanization obligations if the Ministry of Labor changes the list of affected professions and businesses frequently as they may be subject to changing rules regarding ratios of employed Omani nationals to foreign nationals.
  • Companies will have to prepare specific training plans for their Omani employees which may require additional employees to fulfill this role.
  • Further, some of the new Omanization requirements may make it harder for some employers to find sufficient qualified candidates in the local population.
  • Additionally, non-compliant employers will see higher operational costs.

Implementing regulations. Update - November 21, 2024: As anticipated, the Ministry of Labor has released implementing regulations with respect to this law. Although these regulations address various labor law issues (including worker rights, penalties and training) they do not contain any specific updates on immigration or mobility issues, alternative work models (for instance, remote or part-time work), or change-of-employer processes.

The new law creates a more modern and inclusive labor framework, modifying an outdated law from 2003, and aims to promote transparency in worker’s rights and obligations while creating a balanced working relationship for both employers and employees.

The MOL is expected to issue implementing regulations that will provide further framework and details of the new law. It is not clear when these regulations will be available.

This alert is for informational purposes only. If you have any questions, please contact the global immigration professional with whom you work at Fragomen or send an email to [email protected].

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