Oman will launch a first-of-its-kind unemployment insurance scheme next month to help encourage Omanis to consider risk-free employment in the private sector.
The initiative, also known as the Employment Security Scheme, seeks initially to provide a safety net for Omanis being laid off amid the ongoing economic downturn triggered by low international oil prices and aggravated by thepandemic. In the second stage of its implementation, the scope of the scheme will be expanded to cover Omani job-seekers in general.
Instituted by royal decree on 17 August 2020, the scheme was established with an initial grant of OMR10m ($26m) by the sultan. Subsequently, contributions will come from both public and private sector employees who will be required to contribute 1% of their monthly income effective from 1 January 2021.
Slated for implementation on 1 November 2020, the programme has the potential to encourage Omanis to consider employment opportunities in the private sector given that a safety net is being put in place if their jobs are in peril for any reason, according to a top official of the Public Authority for Social Insurance (PASI).
“The scheme will provide social protection for the Omani workforce against a major risk they face in the private sector; namely, involuntary unemployment,” said PASI general manager Dr Faisal Abdullah al Farsi in an interview published recently by ILO News, a newsletter of the International Labour Organisation (ILO).
“Since the scheme will provide insurance coverage in this aspect and give priority to those who have lost employment – in addition to the benefits they will receive – to have access to decent jobs, it will be one of the most important incentives for the Omani workforce to work in the private sector,” Dr al Farsi said.
The novel insurance scheme will provide other benefits for the Omani labour market, he said, adding that it will “lead to job stability for workers in all sectors, help activate employment policies, and stimulate the Omani workforce to enter the labour market and work in jobs with potentially high unemployment risks.”
The scheme is among a raft of measures adopted by Oman’s authorities to help mitigate the adverse impacts of the economic slump and the pandemic on the labour market, as well as low income sections of the community.