The Ajeer system has been an essential part of Saudi Arabia’s employment and immigration framework since its introduction in 2014. It serves as a regulatory mechanism to facilitate the temporary employment of foreign nationals (expatriates) who work for entities other than their original sponsors. By utilizing an electronic platform, the Ajeer system enables businesses to lawfully loan or second workers to other establishments within the Kingdom, ensuring compliance with labor laws and Saudisation policies.

What is Ajeer and How Does It Work?

The term ‘Ajeer,’ which translates to ‘rent’ or ‘loan’ in Arabic, is used in two primary contexts. Firstly, it refers to the online platform that allows foreign workers to be temporarily assigned to different employers while maintaining legal employment status. Secondly, it applies to the provision of laborers through manpower supply companies to their clients. The system aims to create a structured and transparent way for businesses to share workforce resources efficiently.

Key Features of the Ajeer System

The Ajeer system provides several advantages for employers and workers alike. It allows businesses to source laborers already present in the Kingdom, reducing the reliance on overseas recruitment. Additionally, companies with excess workforce capacity can temporarily loan their surplus employees to other enterprises, optimizing labor distribution across different industries. This framework also enables businesses to address short-term workforce shortages without the need for permanent employment contracts. Importantly, Ajeer issues electronic notices to ensure that all worker loan agreements comply with legal regulations, thereby safeguarding both employers and employees.

Eligibility and Compliance Requirements

To utilize the Ajeer system for workforce secondments, both the lending and receiving entities must maintain a ‘medium green’ or higher rating under the Saudisation Nitaqat program. This requirement ensures that companies participating in Ajeer are actively employing a sufficient number of Saudi nationals, aligning with the Kingdom’s vision for workforce nationalization. There are different types of permits available under the Ajeer system, each tailored to specific business needs and employment scenarios.

Types of Ajeer Permits

1. Ajeer Contracting Permit

The Ajeer contracting permit is designed for businesses that provide labor services to other establishments. This permit validates the legal presence of workers in the borrowing company and is available only to businesses engaged in specific industries. To qualify, an employer must have a commercial license for one of the following sectors:

• Construction and building
• Maintenance and operation
• Consulting and business services
• Educational institutions and colleges

2. Ajeer Secondment Permit

The Ajeer secondment permit allows businesses to temporarily lend employees to other enterprises. This is especially useful in cases where an organization has surplus workers that can be utilized elsewhere. The secondment permit is particularly relevant for smaller establishments, including sole proprietorships with up to five employees.

3. ESNAD Permit

The ESNAD permit is specifically issued for the secondment of Saudi nationals between human resource companies and other establishments. This permit helps manage workforce allocation within the Kingdom while ensuring compliance with employment regulations.

4. Special Permits

Beyond standard secondment and contracting permits, Ajeer also offers various specialized permits tailored to different industries and needs. These include:

• Seasonal hiring during the Hajj pilgrimage
• Temporary employment for workers involved in labor disputes
• Short-term work permits for visiting medical professionals
• Temporary chaperon permits for the education sector

Ajeer for Manpower Supply

In addition to workforce secondment, the Ajeer system also governs manpower supply agreements. Companies that provide workers to clients or end-users must report all labor transactions to the Ministry of Human Resources and Social Development (MHRSD). This process ensures that businesses maintain accurate workforce records and comply with Saudisation requirements. The MHRSD recalibrates client headcounts based on the number of workers provided, preventing businesses from manipulating labor statistics to bypass national employment regulations.

The Impact of the Ajeer System on Saudi Arabia’s Labor Market

Since its implementation, the Ajeer system has significantly influenced the Saudi labor market. It has provided businesses with greater flexibility in managing their workforce while upholding the Kingdom’s labor policies. By offering structured permits and legal documentation, Ajeer has reduced instances of illegal employment practices and unregulated worker transfers. Moving forward, the system is expected to expand further, incorporating more industries and enhancing workforce mobility in Saudi Arabia.

The Ajeer system remains a critical component of Saudi Arabia’s employment strategy, facilitating the lawful exchange of labor resources while ensuring compliance with regulatory frameworks. As businesses and workers continue to benefit from its structured approach, the system will play a pivotal role in shaping the Kingdom’s labor market for years to come.

Benefits of the Ajeer System for Businesses and Employees

The Ajeer system presents numerous advantages for both businesses and employees.

For Businesses:

• Workforce Flexibility: Companies facing short-term labor shortages can quickly source skilled workers without undergoing lengthy recruitment processes.
• Cost Efficiency: Hiring through Ajeer reduces costs associated with international recruitment, onboarding, and visa processing.
• Compliance with Saudisation: Businesses can meet Saudisation quotas more effectively by utilizing available expatriate workers within the Kingdom.
• Risk Reduction: Electronic permits and formal agreements ensure legal compliance, reducing the risk of penalties or labor disputes.

For Employees:

• Job Security: Workers can maintain legal employment status while gaining new job opportunities within different establishments.
• Skill Development: Temporary secondments allow employees to gain experience across various industries, enhancing their career prospects.
• Regulatory Protection: Employees working under Ajeer contracts are safeguarded by labor laws, preventing exploitation and unfair treatment.

Ajeer System vs. Traditional Employment in Saudi Arabia

The Ajeer system differs significantly from traditional employment models in Saudi Arabia.

Challenges and Considerations for Businesses Using Ajeer

While the Ajeer system provides significant advantages, businesses must navigate certain challenges, including:

• Regulatory Adherence: Companies must ensure compliance with Saudisation policies and labor laws to avoid fines or restrictions.
• Sector Limitations: Not all industries are eligible to use Ajeer permits, restricting flexibility for some businesses.
• Contractual Restrictions: Some employees may not qualify for Ajeer transfers based on their current job roles or sponsorship status.
• Market Adaptation: Employers must understand how to effectively utilize the system to maximize workforce efficiency without violating labor policies.

Future Developments and Expansions of the Ajeer System

Saudi Arabia’s labor market is evolving, and the Ajeer system is expected to undergo enhancements to support workforce mobility further. Potential future developments include:

• Expansion to New Sectors: The inclusion of additional industries in the Ajeer framework to provide broader workforce mobility options.
• Integration with Digital Platforms: Enhanced automation and artificial intelligence tools to streamline permit applications and approvals.
• Stronger Compliance Measures: Stricter regulations to prevent the misuse of temporary permits and ensure fair labor practices.
• Support for Nationalization Goals: Adjustments in policies to align with Vision 2030, promoting employment opportunities for Saudi nationals.