Oman advances labour protection reforms

BUSINESS REPORTER

MUSCAT, NOV 17

Oman is moving steadily toward a more secure, competitive, and modern labour market as new reforms in social protection and wage regulation begin to take shape. Recent findings from a labour environment assessment survey highlight significant progress in strengthening the safety net available to workers while aligning employment practices with Oman’s economic diversification goals.

The latest measures follow the introduction of the new Labour Law, which broadens the scope of worker protections across unemployment insurance, healthcare coverage, retirement benefits, and compensation during illness or job interruptions. These changes reflect a long-term national strategy to enhance economic resilience and create an environment where both employers and employees can thrive with confidence.

One of the most notable advancements is the government-backed unemployment insurance scheme. According to the survey, the system is designed to support workers who lose their jobs for reasons beyond their control, ensuring income stability while they transition to new opportunities. The insurance model is financed through a combination of public funds and social security contributions, enabling wide coverage that extends beyond traditional full-time employees. This inclusive approach is particularly beneficial for workers on temporary contracts, project-based employment, or self-employed individuals — groups that historically faced higher vulnerability during economic fluctuations.

Healthcare protection has also strengthened under the current legal framework. Institutions are now required to contribute to workers’ healthcare costs, with the level of contribution varying by sector and contract type. The system guarantees access to essential medical services, either through employer support or contributions under the social security structure. Importantly, this foundation opens the door for broader future enhancements, including extended coverage for dependents and families, contributing to greater overall well-being.

In the area of retirement security, Oman continues to build on its contribution-based pension system, jointly funded by employers and employees. The survey notes that this structure strengthens long-term financial stability for workers and encourages sustained participation in the labour market. While harmonisation across various sectors remains a work in progress, the current framework provides a solid base for equitable retirement benefits.

These reforms underscore a larger national transformation as Oman moves from a traditional employment landscape dominated by the public sector to a diversified model driven by private-sector growth, entrepreneurship, and flexible work arrangements. This transition is central to Oman Vision 2040, which prioritises human capital development and sustainable labour practices. Strengthening social protection ensures that this diversification does not leave workers behind, but instead enhances confidence, productivity, and long-term economic participation.

Wage regulation is another area showing encouraging progress. While the Labour Law establishes a unified minimum wage for Omani nationals, the survey highlights ongoing efforts to improve clarity around wage standards, overtime calculations, and sector-specific allowances. Although expatriate wages are contract-based, the government continues to promote fair practices and greater transparency across industries. The Wage Protection System plays an increasingly critical role, ensuring that salaries are paid accurately and on time, reducing disputes and reinforcing trust between employers and employees.

As Oman continues refining its labour governance framework, the overall trajectory remains positive. Expanded protection systems, stronger institutional oversight, and more clearly defined wage mechanisms are creating a more balanced and attractive labour environment. These reforms support national competitiveness while ensuring that workers feel secure, valued, and empowered to contribute to the country’s economic future.