Performance-based increment for Omani workers in private sector

Muscat Daily

27-07-2025

Muscat – Omani workers in the private sector will now be entitled to a performance-based periodic increment every January under new regulations issued by Ministry of Labour.
Ministerial Decision No 317/ 2025, published in the Official Gazette (Issue 1606), sets out the minimum increment and conditions for disbursement. The regulation replaces Ministerial Decision No 541/2013 and comes into effect the day after publication.
Under the new rules, an Omani worker must have completed at least six months of service at an establishment to qualify. The appraisal will be determined based on performance, with minimum increment of 5% of the basic for an 'Excellent' appraisal, 4% for 'Very Good', 3% for 'Good', 2% for 'Acceptable' and none for a 'Weak' rating.
Workers have the right to appeal their appraisal results to the competent department at Ministry of Labour.
In cases where a worker changes jobs within the year, the establishment where they spent the longer duration will be responsible for issuing the performance appraisal, while the new employer will be required to pay the allowance.
The decision also allows employers to reduce the allowance due to economic reasons, subject to approval by the committee referenced in Article 45 of the Labour Law.
Employers may suspend the increment if a worker is under investigation for a workplace-related offence, or if the employee takes unpaid leave or is absent for more than six months in the year. However, increment must be paid retroactively in case of an acquittal.
An administrative fine of RO50 will be imposed on any employer who violates the provisions of the decision, and the fine multiplied by the number of workers against whom the violation occurred.
The decision is part of continued efforts to enhance labour market regulation and ensure fair compensation linked to performance and service duration.