The Oman Ministry of Labour introduced new regulations that reshape the way companies handle salary increases for Omani employees. The new Oman salary increment framework ties annual raises directly to performance, replacing the old flat-rate system.
Under the new structure, employees become entitled to their annual raise on 1 January each year, provided they complete six months of service. The increment depends on performance: excellent ratings secure 5 percent, very good ratings ensure 4 percent, good ratings grant 3 percent, while acceptable ratings guarantee 2 percent. However, employees rated as poor receive no raise. This approach links Oman salary increment rules more closely with merit.
In the past, employees were guaranteed a flat 3 percent increase unless their performance was poor. The new decision replaces that with a sliding scale, offering flexibility and stronger incentives. As a result, workers performing at higher levels can earn more, while employers retain fair control over costs.
The regulations also require companies to conduct annual reviews with clear grading systems. Employees gain the right to challenge unfair assessments directly with the Ministry. Therefore, companies must document performance ratings carefully, including justifications and related decisions. This transparency helps avoid disputes and builds trust in the Oman salary increment process.
Transfers between employers are also covered. The company where the employee spent more time must provide the performance review, while the receiving firm pays the increment. This ensures fair treatment for employees who change jobs mid-year.
Employers may reduce increments in cases of consecutive financial losses lasting two years. However, they must seek approval from the Ministry before making such reductions. This safeguard prevents arbitrary cuts while acknowledging business realities.
The rules also allow suspension of increments in specific cases. These include employees facing workplace-related criminal charges, extended unpaid leave, or absences exceeding six months in the year. These exceptions balance employee rights with workplace discipline.
Non-compliance with the decision carries financial consequences. Companies face fines of OMR 50 per affected employee if they fail to apply the rules. Consequently, businesses must align assessment practices with the Ministry’s grading scale to avoid penalties.
Overall, the new system strengthens fairness and accountability in Oman’s private sector. It rewards top performers, supports transparency, and still provides a legal safety net. For companies, it balances flexibility with responsibility, while for employees, it ensures recognition of effort and achievement.
