Oman, is a high-income economy and ranks as the 70th most peaceful nation in the world according to the Global Peace Index. The country’s economy is largely driven by oil exports, though has diversified over the years. Other major contributors to the economy include tourism, trade of dates, fish, and agricultural products. The government is focused on expanding liquefied natural gas exports and encouraging foreign investment in electric power, petrochemicals, and telecommunications. The measures to mitigate the country’s dependence on declining oil reserves are aimed at reducing the oil sector’s share to GDP to 9% from 45% by 2020.
Currency: Omani Rial
Principal language: Arabic
Government: Absolute Monarchy
Capital City: Muscat
Major Cities: Seeb, Salalah, Bawshar, Sohar
Employment contracts contain:
- Employment conditions
- Detailed job description
- Rights and responsibilities
- Termination conditions
It is a common practice to sign employment contracts in home country before leaving for work in Oman. These contracts must be formalized in Arabic upon arrival in Oman. Part-time employees are generally provided verbal agreements instead of written contracts. Most expatriate contracts are entered into for 2 years, but open-ended contracts have become common in Oman. Open-ended contracts generally specify termination periods varying from 1 to 3 months or provisions for payment instead of notice.
The regular work schedule comprises of work hours, varying from 40 to 48 hours in a week. Normal work hours are from 8.30 a.m. to 5.30 p.m, or from 9 a.m. to 6 p.m. During the month of Ramadan, daily work hours are reduced to 6 hours in a day, mostly for Muslim employees. Friday is observed as a rest day by Muslim employees while most international companies offer Saturday as an off day.
Overtime work is paid at a 25% premium over regular pay for daytime work hours and at a 50% premium for nighttime work hours. If overtime work is done on a rest day or an official holiday is paid at a 100% premium over regular pay or compensated with an additional day off.
The Ministry of Manpower‘s Ministerial Decision No. 1/1976, stipulates that overtime provisions do not apply to senior private sector employees.
The national holidays observed in Oman are as follows:
- Jan 1: New Year
- Mar 20: March equinox
- Apr 13: Isra and Mi'raj
- Jun 15: Eid al-Fitr
- Jun 21: June Solstice
- Jul 23: Renaissance Day
- Aug 22: Eid al-Adha
- Sep 12: Muharram
- Sep 23: September equinox
- Nov 18: National Day
- Nov 21: The Prophet's Birthday
- Dec 21: December Solstice
Under the Royal Decree 113/2011, employees are entitled to 30 days of annual leave after completing 6 months of employment. Annual leave can be split and used at different times. The Omani Labor Law (OLL) states that employees must avail annual leave of at least 2 continuous weeks in 2 years. Employees who leave their job without using their full annual leave are entitled to the regular pay for their accrued annual leave.
Under the Article 66 of the Omani Labor Law, employees are entitled to 10 weeks’ sick leave in a year. Sick leave pay is provided as follows:
- First 2 weeks leave - full pay
- Following 2 weeks leave - paid ¾ of the full salary
- Following 2 weeks leave - paid ½ of the full salary
- Following 4 weeks leave - paid ¼ of the full salary
Employees are required to furnish a medical certificate to establish their sickness. If any dispute arises, the matter is referred to the medical committee whose decision is considered binding in matters of sickness. The Article 43 of the Omani Labor Law states that the employment contract can be terminated if the sickness/injury compels an employee to discontinue work for at least 10 weeks in a year.
Pregnant employees are entitled to 50 days’ maternity leave. Extra days of leave are provided to employees in case of valid medical reasons.
There are no specific provisions for paternity leave in the OLL.
The Ministry of Manpower’s Ministerial Decision 657/2011 states that private-sector employees are entitled to 6 days’ emergency leave if an emergency situation arises suddenly. The leave cannot be taken for more than 2 days in a row.
Special leave is provided under the following circumstances:
- 3 days in case of marriage (once only)
- 3 days in case of death (son, daughter, mother, father, wife, grandfather, grandmother, brother or sister)
- 2 days in case of the death of an aunt or an uncle
- 15 days for performing Al-Haj (pilgrimage) once throughout the period of employment and only after completing 1 year of employment
- 130 days for a working Muslim woman in the event of her husband’s death
- 15 days in a year, if an Omani employee is also an associate student with an institute, school, college or university, to take an examination.
Pension and Social Security
- Old-age Pension
The pension amount is equal to 2.5% of an employee’s wage in the previous 5 years multiplied by the number years of full contributions. The minimum pension in Oman is 100 rials.
- Early Pension
The early pension is reduced based on age and gender. For male employees who retire at the age of 59, the pension is reduced by 6% while for those who retire at the age of 45, it is reduced by 30%. For female employees who retire at the age of 54, the pension is reduced by 7% while for those who retire at the age of 45, it is reduced by 25%.
- Disability Pension
The disability pension is either 40% of employees’ wages when the disability began or is calculated using the old-age pension formula (whichever is greater).
- Survivor Pension
Widows/Widowers are entitled to survivor pension equal to 25% of the deceased’s pension. In case there 2 or more widows, the pension is divided equally among all.
- Orphan's Pension
The orphan pension is given to eligible children of the deceased and is equal to 50% of the deceased’s pension.
- Other Eligible Survivors
Other eligible survivors including the mother, the father, and eligible sisters and brothers, are entitled to 25% of the deceased’s pension which is divided equally. In the absence of any eligible survivor, the survivor benefit is divided among other survivors up to 100% of the deceased’s pension.
The Oman Chamber of Commerce and Industry (OCCI) has announced that health insurance coverage will be made compulsory for private-sector employees. The plan will be implemented over several phases and is expected to be rolled out by early 2018. The first phase will include consulting with companies with more than 100 employees while the second phase will include companies with 50 to 100 employees.
How GPS can Help
With our Global PEO/Employer of Record services, companies can expand into Oman and hire their employees without having to establish a branch office or subsidiary in Oman.
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