Can an employer deduct Iqama and Insurance fee after Resignation?

Policy Regarding Deductions After Resignation

In accordance with Saudi Labor Law, certain obligations and responsibilities are assigned to employers concerning the payment of Iqama fees and provision of health insurance for employees. Here’s a breakdown:

Iqama Fee Responsibility

  • As stipulated in Article 40 (1) of the Saudi Labor Law, employers are mandated to cover the expenses related to Iqama renewal or issuance, commonly referred to as the Maktab Amal Fee.

Health Insurance Provision

  • Article 144 of the Saudi Labor Law emphasizes that it is the employer’s duty to furnish healthcare and insurance benefits to all employees.

Post-Resignation Deductions

  • Following resignation, employers are not permitted to deduct Iqama fees or health insurance costs from an employee’s final salary.
  • The regulations outlined in Articles 40 (1) and 144 prohibit such deductions.

Legal Framework for Deductions

  • All deductions allowable by employers are governed by the regulations specified in these two articles, along with the broader rules outlined in Article 77 of the Saudi Labor Law.

By adhering to these legal provisions, both employers and employees can ensure compliance with Saudi labor regulations regarding financial matters related to employment.