In the current month of April, the General Authority for Insurance began applying the rules for imposing fines on violating establishments if it is proven that they have committed one of the following violations (registration of a participant without a work relationship, specifying a reason for exclusion that does not correspond to the actual reason for exclusion, registration of a contributor with an incorrect wage, failure to register a contributor with an existing an actual business relationship, providing incorrect data or refraining from providing data, which leads to unjustly disbursing compensation).
And the Insurance Corporation stated that registering a participant with any establishment without an actual work relationship, his fine for small establishments that employ 10 workers or less will amount to 300 riyals for each subscriber, in addition to a financial fine for the amount of contributions in the event that the subscriber does not benefit from the disbursement of any compensation the first time. And the fine increases to 500 riyals the second time, until it reaches 1000 riyals the third time, but if the contributor is proven to benefit from compensation because of his violating participation, the fine on the facility will be 1000 riyals the first time, 2000 riyals in the second, and 4000 riyals in the third.
As for large establishments that employ 51 or more individuals, the fine will reach 4,000 riyals for each contributor if the number of violators is more than 3 individuals, in addition to a fine for the amount of contributions, and violations may reach 16,000 riyals for each contributor if that violation is repeated by the company for the third time. In the event that the subscriber benefits from disbursing any compensation, the fine will reach 5,000 riyals for each subscriber, and for the third time it will rise to 20,000 riyals instead of 16,000 riyals.
And the Insurance Corporation indicated that the aim of the rules for imposing fines is “to mitigate the financial effects of small and medium enterprises, and to give an opportunity to enterprises that are ignorant of the regulations by educating them about the violations committed and not imposing a financial fine for the first time in which a non-serious violation is committed, and the amounts of fines are reduced for enterprises that commit. Less severe violations, and determining the appropriate fine for the facilities according to the size of the facilities and the severity of the violation.
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Abdul Rahman Al-Misbahi (Jeddah) @ sobhe90
