New labour decision guarantees annual allowances tied to employee performance ratings
In a major step toward fairer compensation and stronger worker protections, Oman’s Ministry of Labour has introduced Ministerial Decision No. 317/2025, mandating performance-based annual bonuses for Omani nationals working in the private sector. Effective January 1 each year, the regulation applies to employees who have completed six months of continuous service and achieved a performance rating of at least “Acceptable , reported timesofindia.indiatimes.com.”
The annual periodic allowance is structured based on performance ratings as follows:
-
Excellent – 5% of basic salary
-
Very Good – 4%
-
Good – 3%
-
Acceptable – 2%
-
Poor – No bonus
These are minimum thresholds and do not override better employer policies already in place.
Allowance May Be Suspended or Reduced in Certain Conditions
Omani private sector employees now guaranteed annual performance-linked bonuses under new Ministry of Labour ruling.
Employers can only suspend or reduce allowances under the following approved scenarios:
- Economic hardship, validated by the Ministry’s committee as per Labour Law.
- Ongoing disciplinary investigation—if the employee is later cleared, the bonus must be paid in full.
- Unpaid leave exceeding six months in a calendar year—allowance is paused but resumes once leave ends.
The decision also outlines grievance mechanisms for employees to contest unfair performance ratings through official Ministry channels. Employers who fail to comply may face an administrative fine of OMR 50 per employee.
A Step Forward in Oman’s Labour Reforms
This new regulation supports Oman’s Vision 2040 by:
- Strengthening Omani employee rights
- Promoting wage transparency
- Reducing employer discretion and variability in performance-based pay
- Enhancing the private sector’s appeal for local talent
By standardizing bonus structures and enforcement, the decision aligns financial rewards with merit, while also introducing accountability measures for employers.
FAQ Summary
- Who qualifies?
Omani private sector workers with ≥6 months’ service and a rating of “Acceptable” or higher.
- How much is the bonus?
Between 2–5% of basic salary, based on performance.
- Can companies opt out due to poor finances?
Yes, but only with committee-approved justification.
- What if I took unpaid leave?
If it exceeds six months, you won’t get a bonus that year.
- What’s the penalty for non-payment?
A fine of OMR 50 per affected employee.
