The below illustrates the major points which you should know about the new Social Insurance Law No. (1) of 2022 (the “Law”) with respect to the rights and obligations of both the insured employee and the employer.
| What should the employer know about the Law?
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| 1 | Definition of employer according to the Law | The law defines the employer as (1) the governmental sector, including ministries, governmental bodies, public authorities and institutions, and (2) the private sector, which is every natural or juristic person, employing one or more Qatari workers for salary.In light of the above definition, the law excludes from being subject to it, every private entity which does not employ one Qatari person or more on regular basis. This should include Qatari employees who work for the employer in consideration for fees or remuneration such as consultants who do not serve the employer based on employment contracts, or employees who are employed by virtue of temporarily contracts of less than one year. |
| 2 | Obligation to pay contributions | The employer is obligated to pay 14% out of the entire insurance contribution amounting to 21% of the employer’s salary, provided that the employer deducts the remaining 7% of the insured’s salary and transfers it to the Social Insurance Authority (the “Authority”).The employer is obligated to pay the due subscription for the housing allowance for the period of complementary service for a period of (15) years upon the expiry of the employment service period of the insured in the event of (1) death, (2) disability, or (3) reaching retirement age of no less than (60) years old. |
| 3 | Obligation to pay the contributions to the Authority | The employer is obligated to pay the contributions and the deduction and to supply them to the Authority within a date not exceeding the fifth day of the month following the month for which these contributions are due. |
| 4 | Obligation to register and send a list of participating employees to the Authority | The employer is obligated to update his company’s data with the Authority within (14) days from the date when the Law comes into force (i.e., after 6 months from the date of publishing the Law in the Official Gazette), and the employer is also obligated to send a list of the names of the participants to the Authority within (90) days from the date when the Law comes into force.In the event that the employer is not registered with the Authority, he is obligated to register himself within (30) days from the date of the Law comes into force.
In case of new companies that are established after the effective date of the Law, they are obliged to register with the Authority within (14) days from the date of commencement of their activities. |
| 5 | When the employer is not obliged to register | The employer is not obligated to register the employee with the Authority or pay the subscription on his behalf if the employee is working for another entity which is subject to any of the retirement and insurance laws, as the subscription/contribution is limited to one job only.In addition, the employer who has a retirement regime that guarantees better benefits to the employee is not obligated to pay the contributions of the employee to the Authority according to the Law. |
| 6 | The obligation of employer to submit a list of employees and their contributions to the Authority | The Law requires the employer in the private sector to submit to the Authority in the month of January of each year the subscription data of his employees for this month and their monthly contributions, and to inform the Authority of any change therein, if any.In the event that the employer does not register himself or fails to pay the contributions for all or some of its employees or workers, or does not pay contributions on the basis of the actual/real salaries, the employer will be obligated to pay an additional amount of (10)% of the total value of the real due contributions. |
| 7 | Delay in paying the contributions | In case contributions have not been made on their due dates, a delay fine of 2% shall be imposed on the payment of contributions and any other amounts due to the Authority from the date they are due until the date of settlement. |
| 8 | Penalties | Employer, who did not subscribe with the Authority for any of his employees subject to the provision of the Law, or the employer, who subscribed with the Authority based on fake salaries, shall be punished by imprisonment for a period not exceeding six months and a fine of not more than 30 thousand riyals, or by either offence.In addition, anyone who in bad faith provides incorrect data or refrains from providing the data requested by the Authority shall be punished by imprisonment for a period not exceeding three months and a fine not exceeding 50,000 riyals, or by either offence. |
| What should the employee know about the Law? | ||
| 1 | Requirements that need to be met by the insured employee.
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* He/she shall not be less than 18 years old, and
* He/she shall be working for the employer based on a regular employment relationship of not less than one year. |
| 2 | The Law does not apply to the following categories of employees.
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* Military employees who are subject to the military retirement law.* Employees who are subject to retirement or insurance schemes that provide them with better benefits. In other words, if the company has a pension or insurance scheme that arranges benefits better than the law, the company’s pension scheme shall supersede the Law. |
| 3 | Calculation of contribution and deduction
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The contribution of the insured is calculated on the basis of the salary of the contribution which shall not exceed 100,000 riyals, provided that 7% of the employee’s salary shall be deducted by the employer and sent to the Authority.The employer is obligated to pay the contribution and deduction to the Authority within a date does not exceed the fifth day of the month following the month for which these contributions are due. |
| 4 | Suspension of contributions
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The periods of suspension or cessation of work shall not be included in the calculation of the subscription period if it is decided to deprive the employee of his full salary, and they are not counted among the periods necessary for entitlement to the pension. |
| 5 | Inclusion of subscription periods
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The Law allows the employee to request the inclusion of his previous service period(s), or part of them, into his current service period, according to the following:* The term of service with an employment entity subjected to the Law shall be actual and permanent.
* The service period shall have been started after the age of (18) years. * The period for which a pension or pension is due shall not be subject to any other pension system. * It is not permissible to include more than five years, except for previous service in the governmental sector, or private institutions of public benefit, or public shareholding companies or companies in which the state contributes, whatever the length of service. * Paying the contribution due for the previous period(s) at 21% on the basis of the contribution calculation salary on the date of submitting the inclusion request or the pension calculation salary, whichever is higher. |
| 6 | Purchasing additional service terms
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The law permits a person whose service has ended to request the purchase of a nominal/fictional service period to be added to his actual service period according to the following:* He must not be less than (50) years old when submitting the application.
* His actual service period shall not be less than (20) years. * The purchased period shall be limited to the period specified for entitlement to the pension. * Obligation to pay the contribution due for the purchased period at a rate of 21% on the basis of the contribution account salary on the date of the purchase request or the pension account salary, whichever is higher. * To submit the application within a period of one year from the date he/she becomes aware of the decision to end his service. |
| 7 | Payment of contributions in the event of death for those who requested additional service terms
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In the event of the death of the pensioner before completing the full payment of the remaining contributions installments, all installments shall be forfeited and the state treasury shall bear the payment of the remaining installments. |
| 8 | Delay in paying the contributions
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In case contributions have not been made on their due dates, a delay fine of 2% shall be imposed on the payment of contributions and any other amounts due to the Authority from the date they are due until the date of settlement. |
| 9 | Settlement of Pension and paying it out.
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A pension is due in the following cases:* Death.
* Disability * Reaching the retirement age (i.e. at least (60) years.) * Resignation. Employee must be at least 50 years old. * Dismissal by a disciplinary decision or based on the issuance of a final judgment against the employee. * Termination of service for any other reason. It is stipulated that the period of subscription shall not be less than (25) years, including an actual service period of no less than (20) years. |
| 10 | Accumulated periods
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In order for the service period to be considered continuous, the insured person must join an entity subject to the provisions of the Law and submit a request not to receive the pension within (30) days from the date of the end of his service. |
| 11 | Minimum amount of Pension payable
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The minimum pension amount of an employee working for the governmental sector is 15000 Riyals. The same rate may be applied to the private sector’s employees upon the approval of the Council of Ministries. |
| 12 | Permission to add more than one allowance
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The law permits the insured employee, whose actual period of service exceeds 30 years, to be granted a special allowance/bonus for the excess period. Such allowance shall be paid from the retirement fund, and it is permissible to combine the said bonus/allowance with any other remuneration determined by the employment laws and policies of the employer, as the case may be. |
| 13 | Time limitation to claim rights enshrined by the Law | The right to claim the rights stipulated in the Law shall be time barred after the lapse of two years from the date of notification of the entitlement to pension or from the date of disbursement of pension, except in case of requesting a re-calculation of the pension with an increase. |
For more information about the Social Insurance Law, please do not hesitate to contact us on info@alansarilaw.com
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