Oman Launches New Leave Insurance Framework

Oman's Social Protection Fund (SPF) has launched the operating framework for a new Sick Leave and Extraordinary Leave Insurance Branch, marking a major reform in the country's workplace social protection system. This significant reform in Oman’s workplace social protection system is set to take effect this month. The framework officially came into force on July 19. The new insurance branch is positioned as one of the key pillars within Oman’s broader social protection reforms. Officials have stated that the launch of this new insurance branch represents a significant step in strengthening Oman’s social protection system, enhancing the safety net available to workers across various sectors.

Who Is Covered

The new insurance branch will cover all Omani citizens employed across the civil, military, security, and private sectors, irrespective of their specific contract type. This full coverage ensures that a wide array of Omani workers will benefit from the new provisions. Coverage extends to individuals on permanent, temporary, and training contracts, as well as retired persons who remain in employment. This broad scope aims to provide consistent social protection across different employment statuses. The scheme also includes eligible non-Omani workers within government administrative units and private-sector establishments that are governed by the Labour Law, further extending the reach of these new protections.

However, certain categories will not fall under the purview of the new insurance branch. These exclusions include self-employed Omanis, part-time workers, Omanis working abroad or in Gulf Cooperation Council (GCC) countries, and categories explicitly excluded from the Labour Law, such as domestic workers. The framework delineates these specific exclusions to ensure clarity regarding the scope of coverage.

Sick Leave Benefits Detailed

Employers will continue to pay employees their full wages during the initial seven days of sick leave. This initial period of full employer-paid leave remains unchanged under the new system. From the eighth day onwards, the Social Protection Fund (SPF) will begin compensating insured employees based on a graduated payment structure linked to their final wage. This system ensures a phased approach to sick leave remuneration, providing financial support as sick leave extends.

Under the new framework, employees are set to receive 100 per cent of their final wage for the period spanning the eighth to the 21st day of sick leave. This ensures full income replacement for the initial phase of SPF-covered sick leave. Following this, the compensation rate adjusts. From the 22nd to the 35th day of sick leave, employees will receive 75 per cent of their final wage. The payment structure further stipulates that employees will be compensated at 50 per cent of their final wage for sick leave taken between the 36th and 70th day. For extended periods of absence, from the 71st to the 182nd day of sick leave, employees will receive 35 per cent of their final wage. The new sick leave compensation scheme specifies an overall annual limit, with payments capped at a maximum of 182 days within a calendar year. This graduated scale is designed to balance support for employees with the sustainability of the fund.

Extraordinary Leave Provisions

The insurance branch introduces a structured system for paid extraordinary leave, providing financial security during significant life events. Employees will receive 100 per cent of their final wage for specific approved extraordinary leave categories. Among these provisions, individuals are granted three days of leave at 100 per cent of their final wage for marriage, acknowledging this important personal milestone.

The framework also outlines paid leave for bereavement. Employees will receive 100 per cent of their final wage for three days following the death of a parent, grandparent, sibling, son, or daughter. For the death of a paternal or maternal uncle or aunt, employees are entitled to two days of leave at 100 per cent of their final wage. These provisions aim to support employees during times of loss.

Specific provisions are established for widows and widowers, reflecting cultural and social considerations. Muslim women will receive 130 days of paid extraordinary leave following the death of their husband, while non-Muslim women are granted 14 days of paid extraordinary leave under the same circumstances. Muslim men will receive 10 days of paid extraordinary leave following the death of their wife. These differentiated periods cater to specific religious and social practices.

The new system addresses leave for accompanying family members during medical treatment. Workers accompanying a spouse, parent, son, daughter, brother, or sister for treatment will receive compensation at 100 per cent of their final wage for the first 15 days. This initial full compensation provides immediate support for caregiving responsibilities. For any remaining approved period beyond these initial 15 days, workers accompanying a qualifying family member for treatment will receive 50 per cent of their final wage. This continued, albeit reduced, compensation ensures ongoing support for extended care.

Implementation and Financing

Applications for compensation will be submitted through the Social Protection Fund (SPF) electronic services portal starting August 1. The first payments from the new insurance branch are expected to be disbursed in early August, signaling the rapid operationalization of the new system. The SPF will finance the new insurance branch through a 1 per cent employer contribution, calculated on employees’ full wages without any salary ceiling. This contribution model ensures a stable and equitable funding mechanism for the new benefits. The Social Protection Fund will issue monthly contribution invoices to facilitate this funding mechanism, streamlining the collection process.

Employers will continue to approve leave requests after verifying the required supporting documents submitted by employees, maintaining their role in the initial approval process. The SPF retains the authority to review claims, request additional information, and recover payments made without entitlement, ensuring the integrity and proper use of the fund. Periods spent on approved sick leave or extraordinary leave will continue to count as actual service for employees, safeguarding their employment rights and benefits. All applications for sick leave and extraordinary leave compensation will be processed through the SPF electronic services portal from August 1, 2026, marking a full transition to digital processing for these claims.