Wednesday 22 / July / 2026
MUSCAT: A major reform in Oman’s workplace social protection system is set to take effect this month as the Social Protection Fund (SPF) launches the operating framework for the new Sick Leave and Extraordinary Leave Insurance Branch, creating a unified mechanism to support employees during prolonged illness and major family emergencies while reducing the financial burden on employers.
The framework, which came into force on July 19, translates the provisions of the Social Protection Law into an operational system, setting out how employers and insured workers will contribute to, apply for and receive benefits under the new insurance branch.
Applications for compensation will be submitted through the SPF electronic services portal from August 1, with the first payments expected in early August after employers complete their monthly contribution settlements.
The new insurance branch is one of the key pillars of Oman’s wider social protection reforms, aimed at providing income security to employees during periods of temporary incapacity while ensuring employers are compensated for eligible wage payments and insurance contributions made during approved leave periods.
According to the guideline issued by the SPF, the scheme is designed to strengthen employment stability, protect workers’ rights and reduce the financial impact of illness-related and emergency-related absences.
Broad coverage for workers
The guideline confirms that the insurance branch will cover all Omanis employed in the civil, military, security and private sectors, regardless of their contract type.
The coverage includes permanent, temporary and training contracts, as well as retired persons who continue working.
The scheme will also cover eligible non-Omani workers employed in government administrative units and private-sector establishments governed by the Labour Law.
However, self-employed Omanis, part-time workers, Omanis working abroad or in GCC countries, and categories excluded from the Labour Law, including domestic workers, will not fall under the new insurance branch.
Sick leave compensation
Under the new framework, employers will continue paying employees their full wages during the first seven days of sick leave.
From the eighth day onwards, the SPF will compensate insured employees according to a graduated payment structure linked to their final wage.
Employees will receive 100 per cent of their final wage from the eighth to the 21st day, 75 per cent from the 22nd to the 35th day, 50 per cent from the 36th to the 70th day, and 35 per cent from the 71st to the 182nd day.
The guideline limits sick leave compensation to a maximum of 182 days in a calendar year.
Employers may provide additional sick leave beyond this period under their own internal regulations, but such additional leave will not be reimbursed by the Fund. The guideline also states that employers cannot require employees to perform work while they are on sick leave.
Paid extraordinary leave introduced
The insurance branch also introduces a structured system for paid extraordinary leave covering major personal and family circumstances.
Employees will receive 100 per cent of their final wage for approved extraordinary leave categories, including:
Three days for marriage; Three days following the death of a parent, grandparent, sibling, son or daughter; Two days following the death of a paternal or maternal uncle or aunt; 130 days for a Muslim woman following the death of her husband; 14 days for a non-Muslim woman following the death of her husband; 10 days for a Muslim man following the death of his wife.
The framework also covers employees accompanying close family members for medical treatment.
Workers accompanying a spouse, parent, son, daughter, brother or sister for treatment will receive compensation at 100 per cent of the final wage for the first 15 days, followed by 50 per cent for the remaining approved period.
Employers to contribute 1%
The new insurance branch will be financed through a 1 per cent employer contribution calculated on employees’ full wages without any salary ceiling.
The contribution applies to Omani and eligible non-Omani employees covered under the scheme.
The SPF will issue monthly contribution invoices, while employers will remain responsible for maintaining accurate employee records, updating wage information and paying contributions within the required deadlines.
The Fund said benefit calculations will depend on wage information submitted by employers, making accurate reporting an important requirement under the system.
Roles of employers and SPF
The guideline sets out clear responsibilities for employers and the Fund in managing applications.
Employers will continue approving leave requests after verifying the required supporting documents submitted by employees. The SPF, however, will have the authority to review claims, request additional information and recover payments made without entitlement.
Periods spent on approved sick leave or extraordinary leave will continue to count as actual service, ensuring employees retain their employment rights and continuity of service.
The guideline also clarifies that employers will continue paying statutory insurance contributions during sick leave after deducting the employee’s share, with eligible amounts reimbursed or settled by the Fund according to approved procedures.
If an employee changes employers while receiving benefits, compensation will continue for the remaining approved leave period based on the employee’s final wage before the transfer.
All applications for sick leave and extraordinary leave compensation will be processed through the SPF electronic services portal from August 1, 2026.
The Fund said the launch of the new insurance branch marks a significant step in strengthening Oman’s social protection system by providing wider financial security for employees while creating a more balanced mechanism for employers managing extended leave periods.
