The Oman Ministry of Labour ("MOL") has issued Ministerial Decision No. 317/2025 ("MD"), introducing updated provisions on salary increments for Omani employees. The MD replaces the previous Ministerial Decision No. 541/2013, which mandated a 3% annual increment for employees who were appraised with satisfactory performance. Employers should take note of the following key changes and requirements:

Key Provisions 

• Applicability: The MD applies exclusively to Omani employees.
• Eligibility: Employees must have completed six months of service by the increment due date.
• Effective Date: The new salary increment rates take effect from 1 January 2026.
• Increment Basis: Increments are calculated on the employee's basic salary.
• Increment Rates:
  
  • 5% for an "excellent" evaluation.
  • 4% for a "very good" evaluation.
  • 3% for a "good" evaluation.
  • 2% bonus for an "acceptable" evaluation.
  • No increment for a "weak" evaluation.

Additional Requirements and Considerations

• Performance Evaluation: Employers must prepare an annual performance evaluation report for each Omani employee. It is unclear whether this report must be submitted to the MOL.
• Transferred Employees: Employers are responsible for disbursing the increment to employees transferred to them from another employer. While the MD is unclear, this likely applies to business or service contract transfers where the incoming employer acquires the employees of the outgoing employer. 
• Reduction or Suspension of Increment: Increments may be reduced or suspended in specific situations, as follows:
  
  • Employer financial hardship (reported to the MOL committee).
  • Employee is subject to a criminal investigation/action for a suspected felony or misdemeanour
  • Employee absence from work for over six months or unpaid leave.
• Employee Grievance Rights: Employees may file grievances with the MOL regarding their performance ratings.
• Employer Penalties: Employers violating the MD may face a penalty of OMR 50 per affected employee.