Decree Blog

Annual leave is a statutory right under Omani Labour Law. Although this right is well established, many employers and employees remain uncertain about its practical management, particularly when work requirements necessitate postponement or in cases of leave accumulation. This blog post provides practical insights on managing annual leave, explaining the statutory entitlements, the conditions governing postponement and carry-over of leave, and the circumstances under which compensation is required by law.

As money laundering and terrorist financing methods become more sophisticated, criminals are increasingly using multi-layered corporate structures to hide the individuals behind the business. This lack of transparency makes it difficult for authorities to trace illicit funds. In response, governments across the Middle East are shifting toward stricter transparency measures to align with international standards that require companies to disclose the identity of the ultimate beneficial owners, or UBOs, and maintain a register for the government to inspect at any time. This blog post will highlight the Omani legal framework in this regard and the key UBO obligations in Oman.

The Labour Law provides a strict legal framework for governing overtime work in Oman, such as the maximum number of permitted overtime working hours, employee consent requirements, and the mechanism for calculating the pay. This blog post will highlight three key provisions relating to overtime in Oman that all employees and employers need to be aware of.

Maximum Overtime Working Hours

Under articles 70 and 71 of the Labour Law, the maximum regular working hours are capped at 8 hours per day and 40 hours per week. The law also caps the number of regular hours plus overtime to 12 hours.

It is important to note that these hours are “actual” working hours hence, they do not include the mandatory daily rest and lunch break. The law stipulates that a continuous working period must not exceed 6 hours without a break, which is generally one hour.

This distinction that rest periods are not working hours has been reinforced by the Omani judiciary. A notable principle from Supreme Court Contestation 766/2017 confirms that rest time is excluded from overtime calculations, ensuring that compensation is based strictly on time spent working.

Consent is Required for Overtime Work

A primary requirement is that employers must obtain the worker’s written consent before assigning overtime, ensuring the employee agrees to the extra work.

Despite the general requirement for consent, there are specific exceptions under article 72 of the Labour Law. For example, article 72(1) permits the employer to require the employee to work overtime in cases such as annual inventory work, budget preparation, liquidation, and the closing of accounts. Article 72(2) also permits the employer to require the employee to work overtime if it is required to prevent the occurrence of an accident or other similar emergencies. However, in this case the employer is required to inform the Ministry of Labour of this.

Calculating Overtime Compensation

When employees agree to overtime, they are entitled to their basic wage plus a surcharge that scales based on when the work is performed. For instance, daytime overtime commands a minimum 25% increase, while night work which is defined as 9pm to 5am that requires at least a 50% surcharge. Work on weekends and official holidays is compensated with a 100% surcharge or a compensatory rest day. However, in mandatory emergency situations where consent is waived, these rates are 50% for daytime hours, 75% for night hours, and 200% for work performed on rest days or holidays.

Conclusion

We highly recommend that both employers and employees make themselves familiar with the legal provisions relating to overtime by reading the full text of the Labour Law on the link below:

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The probation period is an essential stage of the employment relationship as it enables both the employer and the employee to assess whether the working arrangement is suitable. The Labour Law sets a number of detailed rules governing the duration of the probation period, the rights of employees during this stage, and the obligations employers must observe.

This blog post will highlight the key provisions relating to probation periods under the Labour Law.

Bilateral Investment Treaties, or better known as BITs, are agreements between two countries that set rules for how investors from one country can invest in the other. They are designed to promote and protect foreign investments by creating a stable legal framework that gives investors the confidence when doing business abroad. That framework creates obligations for the host government to treat foreign investors with particular standards, as well as, grant foreign investors the right to bring claims against the host government directly in the case of violations of the treaty.

Oman routinely signs BITs with other countries as part of its strategy for foreign investment and has 30+ agreements with countries such as the UK, Germany, and Japan.

Here are some key investors rights commonly found in BITs:

Oman’s recent enactment of the Law of Special Economic Zones and Free Zones of 2025 marks a significant step toward unifying and enhancing the country’s investment environment. This landmark decree, which repeals the former Free Zones Law of 2022, establishes a unified framework to strengthen Oman’s investment environment and advance Oman Vision 2040. For investors, understanding its new incentives and distinctions is key to unlocking opportunities in the Sultanate of Oman.