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Article | Global News Briefs

Oman: Major social security reform extends benefits to expats

By Steve Clements | August 25, 2023

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.
Health and Benefits|Benessere integrato|Retirement

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 50 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 payable by employers at between 25% and 100% of pay (depending on the duration of leave) for up to 45 calendar days. Social security paid leave benefits will also be introduced for certain personal events (e.g., marriage, bereavement, caring for a family member), financed by an additional new social security contribution of 1.0% of covered pay.
  • Work injury/illness benefits (effective July 2026): Extend coverage to foreign workers.
  • End-of-service grant for foreign workers (effective by July 2026): Replace, for future service, the current employer-paid lump sum benefit (based on final pay and years of service) with individual accounts funded by contributions of 9.0% of employee pay, and potentially by other sources that may be specified in future regulation. The new law is unclear on which party is responsible for the 9.0% contribution, but presumably it is the employer (a point also expected to be clarified in regulations).
  • Minimum social protection benefits (from January 2024): Establish government-paid benefits for Omani citizens, such as child allowances, family income support, orphan and widow benefits, and minimum disability and pension benefits.

Employer implications

More detailed regulations are expected, but employers should start to prepare for the effects of these far-ranging, significant reforms. The creation of individual accounts to fund end-of-service benefits for foreign workers will make Oman the first of the six Gulf Cooperation Council (GCC) states to create funded accounts for foreign workers (the DEWS plan in Dubai applies only to employees in the DIFC), but other GCC states are understood to be examining the creation of similar arrangements.


Senior Director, Integrated & Global Solutions, CEEMEA

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