Oman PEO & Employer of Record Services
Global PEO Services (GPS) helps companies hire employees in Oman without establishing a legal entity. All human resources, benefits, payroll, and tax needs for the employees are managed by the Global PEO, while the new hires and headquarter teams focus on your business goals.
When hiring employees in Oman, establishing a subsidiary or branch office is not always the best route, as it’s often a lengthy and expensive process. Hiring via a Professional Employer Organization (PEO), or Employer of Record (EOR), is a faster and often more effective option – especially when starting up in a new country.
Global PEO Services hires the employees on your behalf, legally contracting them through our subsidiary in accordance with Oman labor laws. As a result, the burden of compliance is on us and the employees can begin work for your company in a matter of days. PEOs/EORs provide you with a streamlined option for hiring employees, testing markets, and responding to growing business needs in Oman. With Global PEO Services, you get control without taking on legal entity liabilities, contractor risks, or sacrificing on talent or speed to market.
Oman - Country Overview
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 it 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 of GDP to 9% from the current share of 45% by 2020.
Seeb, Salalah, Bawshar, Sohar
Employment Contracts in Oman
It is a common practice to sign employment contracts in the home country. 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.
Working Hours in Oman
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, it 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.
Employee Leave in Oman
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 as the evidence of 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 (only once)
- 3 days for death in the family (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.
Employee Benefits in Oman
Pension and Social Security
- Old-age Pension
The pension amount is equal to 2.5% of the employee’s wage over the previous 5 years, multiplied by the number of 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 the case there are 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 Ministry of Health (MOH) emphasizes on the need to develop innovative health care financing and insurance solutions. It is because the government cannot continue to provide sustained finance for the majority of health care in the Sultanate. In 2018, insurance became mandatory for expats in the private sector. Also, there are plans to make the national health insurance compulsory as well.