There are many areas of your business where legal and compliance directives play a role, and working in the Middle East, this is no different. However, in some countries of the Middle East, there's an added layer of regional compliance on top of federal law. And then there are grouped country agreements which affect employment too.
So, how should you best approach complex workforce compliance? Here in the Middle East, many global brands choose to outsource manpower—but should you?
In this blog post, we'll offer our advice as Middle East outsourcing and HR experts to help you make the best decision for your company.
Middle East Workforce Legal and Compliance Issues: How Complex Are They?
To make this discussion succinct, let's examine one legal and compliance issue: labour laws in the Gulf Cooperation Council (GCC)—a small group of Middle Eastern countries.
The Gulf Cooperation Council (GCC) countries, including Bahrain, Kuwait, Oman, Qatar, Saudi Arabia and the UAE, have distinct labour regulations. However, they do come together to comply with a regional agreement known as the Kafala system (a sponsorship system for migrant workers under specific employers).
The Kafala system has undergone significant reform to offer more freedom for migrant workers, but under this agreement each country has the right to enforce changes from a country-focused law perspective. And change in these countries is happening.
For example:
● United Arab Emirates (UAE): The UAE recently introduced sweeping reforms under its Federal Decree-Law No. 33 of 2021, enhancing worker protections, promoting equal pay, and clarifying leave entitlements (also adapting its approach to the Kalafal system). These are not observed in free zones, like the Dubai International Financial Centre (DIFC), which operates under its own employment framework.
● Saudi Arabia: As part of its Vision 2030 program, Saudi Arabia has modernised its labour compliance laws to attract more international businesses. Part of the amendments have focused on easing the employer-employee relationship under the Kafala system, allowing greater mobility for expatriate workers.
● Qatar: Qatar has implemented significant labour reforms in preparation for hosting global events (World Cup 2022), including a non-discriminatory minimum wage and improved conditions for expatriates under its own amended version of the Kafala system.
Yet each country's employee guidelines differ. To ensure your workforce processes remain compliant, you need to understand the law in each country and across a grouped region.
Then, there are regional changes within a country.
Countries like Iraq face changes in regional labour regulations. For example, cities like Baghdad and Erbil tend to have more formalised labour markets over rural areas, with better enforcement of labour laws. Added to this is the difference between the rule of federal Iraq and the Kurdistan Region.
Understanding the expectations of any region, country or group of countries is critical for workforce compliance.
Middle East Workforce Legal and Compliance Issues: Can You Really Handle Them In-House?
The biggest question you will need to answer is: If you are working overseas or are planning to, can you afford to handle workforce management and compliance in-house? More importantly, will you see a return on investment (ROI)?
Or would a third party, a company with feet on the ground, be a better option?
Typically speaking, and in our experience, leading global brands agree—outsourcing to a staffing provider with localised hubs, offers a unique opportunity for efficiencies and risk mitigation across the board.
And the secret ingredient is proactivity. A trusted partner who can provide full-time, part-time, and contingent staff and a unique understanding of localised, country-wide, and regional laws makes for a more forward-thinking approach to employee sourcing, management and compliance. They can also handle scale and cross-border growth.
How Working With mselect Solves Your Workforce Legal and Compliance Issues
We, mselect, have worked as workforce specialists throughout the Middle East for several years. We have hubs in multiple locations across the region, employing recruitment and HR specialists to deliver full-time, part-time, and contingent staff.
Acting as your employer or record (EOR), we employ and manage the staff in your business, including expats from as far away as the UK.
While we operate on a more regional footing with Global brands across the Middle East, we are very much 'local' with teams that intimately understand the nuances of each country's legal and compliance frameworks. And because we take a local approach, we have a deeper appreciation for the people and culture that make each country unique. This allows us to act proactively for our clients, making working in the region feel like smooth sailing.
And we could do this for you, too.
Would you like to learn more about how we could help you find the right people for your project? Contact your local Middle East team today.