MUSCAT : Expatriate workers in Oman have welcomed the government’s decision to introduce a savings scheme in July 2027, saying it could help protect benefits that some employees have struggled to recover after leaving their jobs or when companies close.

The scheme, announced by the Social Protection Fund (SPF), will take effect on July 19, 2027, requiring employers to contribute 9% of each worker’s basic monthly wage. It will replace end-of-service gratuity for employment periods covered by the new system.

For workers, the announcement addresses a concern that can follow years of service: whether the money they are counting on will be paid when their employment ends.

Vinod Parakkat, a sales manager at a building materials company, said he welcomed the decision after seeing friends struggle to obtain their gratuity.

“I know friends who were denied their gratuity by their companies. Sometimes companies lay off workers without clearing their dues,” he said.

Parakkat said those experiences highlighted the importance of having a system to safeguard workers’ accumulated benefits.

Mohammed Mustafa, an expatriate who has worked in Oman for 12 years, recalled how a friend lost his end-of-service benefits after moving to another employer.

His previous company had promised to settle the amount later, but the payment never came. The business subsequently shut down because of bankruptcy, Mustafa said.

“He lost years of savings,” he said.

Mustafa said the experience had left him concerned about workers’ ability to recover their entitlements when an employer faces financial difficulties. He welcomed the SPF scheme as a step towards greater security for those savings.

Under the new system, workers will accumulate savings through monthly employer contributions, with those funds and their investment returns paid out in accordance with the Social Protection Law.

Gratuity earned before July 19, 2027, will be handled separately. Employers may retain it until the worker’s employment ends, pay it into the worker’s bank account when the scheme begins, or transfer it to the worker’s SPF account.

Where employers retain the earlier gratuity until the end of employment, it will be calculated using the worker’s basic wage at that time, in accordance with the Labour Law.

For workers such as Parakkat and Mustafa, the significance of the change lies in greater confidence that benefits built up during their working lives will be available when they need them.

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