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End of Service Gratuity Laws in the UAE

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The UAE is one of the world’s strictest places when it comes to labor laws, yet it remains a popular business environment. A simple and efficient legal framework exists in the country to support employees.

Employment law in the United Arab Emirates (UAE) varies widely among industries. Here are the three primary industries and the  End of services gratuity law.

  • The Ministry of Human Resources and Emiratization oversees the following companies: The Federal Law No. (8) of 1980, sometimes known as the Labour Law, regulates such businesses. After working for the same employer continuously for a year, employees are entitled to a gratuity. Here is how the gratuity is determined: Pay equal to 21 days’ salary for the first five years of service, 30 days’ salary for each consecutive year of service, and so on, up to a maximum of two years’ salary. The full gratuity payment may be withheld under certain circumstances, and the rules vary for personnel on unlimited-term contracts vs those on limited-term contracts.
  • The Federal Law No. (10) of 2017 was enacted to regulate the domestic service industry. If a domestic worker has worked for the same employer for at least a year, they are eligible for a bonus payment. Payment is based on a 14-day salary multiplied by the number of years of service. End-of-service remuneration, however, may be withheld if the employee leaves their employment or the contract without good cause.
  • The Federal Law No. (8) of 1980 governs the employment practices of most Free Zone enterprises; however, the Dubai International Financial Centre (DIFC) and the Abu Dhabi Global Market (ADGM) have their own employment regulations. The DIFC Employee Workplace Savings (DEWS) Plan was established by an updated law and is funded entirely by employer contributions. In accordance with the Labour Law, ADGM provides a base wage of 21 days after five years of work, and an additional 30 days for each year of service after that, up to a maximum of two years’ salary.

It’s worth noting that employers can take money out of the gratuity to cover employee debts. Workers have the right to file complaints with the relevant agency if their employer violates the law.

To visit labour department website click here

To know more about employment litigation click here

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