Oman waives labour fines to alleviate war-related costs

• Fines worth $250m set aside
• Crackdown on workers eased
• Employees take pay cuts

Oman is waiving labour violation fines to help local businesses after the Iran war hurt revenues.

The fines, totalling OMR100 million ($250 million), cover such issues as unpaid work permit renewals, absconding foreign workers and unregistered employees for 2025. 

After an initial delay on the grounds of budget constraints, the finance ministry approved the budget allocation this week. The move followed a preliminary announcement by the manpower ministry in February, before the conflict began.

In a crackdown last year on illegal foreign workers, law enforcement arrested 12,320 suspected violators across the country and deported 7,600 of them. But the war has changed all that.

The move is intended to help companies save costs amid regional business disruptions caused by the war, Oman Television said, citing a report from the manpower ministry.

Company executives, who are juggling pay cuts and job creation with the war’s pressure on revenues, welcomed the news.

“The gesture is well timed and will protect cash flow and preserve jobs since we now don’t need to pay accumulated labour penalties,” Naifeen Al Bahrani, director of Muscat-based Jumaana Travels, told AGBI.

Analysts say salaries have been cut and headcounts trimmed since the war started, reducing consumer activity and disrupting business confidence.

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“Companies… dependent on cross-border trade or imported raw materials are now facing operational and cost pressures,” Nasser Al Brashdi, executive director at Majan Investment, told AGBI. 

Foreign workers have borne the brunt, accepting pay cuts rather than losing their jobs. 

“It is either losing our jobs or getting a salary reduction in these hard times. I chose a pay cut to keep on working,” Indian national Joshi Mahendra, a truck driver working for Sinan Heavy Lift, said.