Various topics are touched upon under the UAE labour law. Such as Overtime, compensatory off, salary for work on public holiday and friday, Leaves, Gratuity, medical insurance, division of salary, full and final settlement.

1. UAE Labour Law
Olivia Mathew

2. Overtime Calculation
 An overtime is considered if the nature of job demands working
beyond normal working hours.
 The formula for calculating per hour pay is:
 Multiply the gross salary per month by 12 and divide the amount by
365. This will give the salary per day. Divide this 8 to ascertain the
salary per hour.
 In other words,
 Per day salary = (Gross salary per month x 12)/365
 Per hour salary = per day salary/8 or 9
 The UAE Labour Law states that overtime should not exceed two hours
per day, unless it is necessary to prevent substantial loss, a serious
accident or to eliminate its consequences.

3. Overtime on days other than Fridays:
 Once you calculate the “Per hour salary” it is easy to compute the amount for
Overtime.
 Overtime amount when additional work is done
 Between 4 am and 9 pm – “Per hour salary” x 1.25 x number of OT hours
 Between 9 pm and 4 am – “Per hour salary” x 1.50 x number of OT hours
Work done on Fridays:
 If an employee works on a Friday,
 He is eligible for a compensatory day off on another day during the week
Or
 He is eligible for overtime equal to “Per hour salary” x 1.50 x number of OT
hours
 Further, employees may not be assigned work on more than two consecutive
Fridays.
 It is also prescribed in the Employment Law that the daily hours of work are to
be designed by the concerned employer in a manner that employees are not
required to work for more than five hours at a stretch.

4. Compensatory Off
 If circumstances require the employee to work on a Friday, he
must be granted either another day off (in lieu) or receive his
basic salary plus an additional 50% of his remuneration (i.e.
basic salary plus allowances). However, employees cannot be
asked to work more than two consecutive Fridays unless they
are employed on a daily wage basis.
 If an employee works on a public holiday due to exigencies of
work, he is entitled to
 Either one-day compensatory off with full pay,
 Or,
 Extra remuneration @ “Per hour salary” x 1.50 x number of
extra hours worked.

5.  In respect of the national holidays, the Employment Law prescribes
that the employees shall be entitled to get leave with full pay for the
said holidays.
 And where, owing to circumstances of work, employees are required
to work on such days, they shall be entitled to receive compensatory
leave on some other day and also receive additional compensation.
 You shall therefore be entitled to get the compensatory leave and
additional benefits as such.

6. Public Holiday
 Where an employee works on UAE public holidays declared for the
private sector, the employer can elect one of the following payment
structures:
 Option A: 100% of normal daily remuneration (basic salary plus
allowances) + one day's leave in lieu (instead of )plus 50% of
remuneration; or
 Option B: 100% of normal daily remuneration (basic salary plus
allowances) + 150% of basic salary.

7. Types of Leaves
Annual leave
 Employees are entitled to an annual leave of:
 30 days, if they have completed one year of service at the company.
 For every year of service, an employee is entitled to an annual leave of not
less than the following:
 Two days leave for every month if their service is more than six months and
less than a year.
 30 days annually if their service exceeds one year. At the end of the service
the employee is entitled to an annual leave for the fraction of the last year
they spent in service.

8. Sick leave
 Employees are entitled to a sick leave of not more than 90 days per year
subject to conditions stipulated in the law. They will receive full pay for the
first 15 days, half pay for the next 30 days and no pay for the rest 45 days.
Who is not entitled to sick leave?
 The employee shall not be entitled to any paid sick leave during the probation
period.
 The employee shall not be entitled to the wage during the sick leave should
the illness directly arise from the ill behaviour of the employee such as the
consumption of alcohol or narcotics.
Special Leave
 Employees may be granted a special leave without pay, which may not exceed
30 days for the performance of Haj (Mecca) once throughout his service. This
is granted only once during his years of employment. Also the documents
(ticket) related to the travel plans should be submitted to avail the leave.

9. Maternity, childcare leave
 Working females are entitled to 45 days of full pay for maternity leave
provided that she has served continuously for at least one year.
Maternity leave is paid with half pay if one year of service has yet to
be completed. At the end of the maternity leave, the woman has the
ability to extend her leave at an unpaid rate for a maximum period of
10 days.
 For the first 18 months following delivery, female employees who
nurse their child are granted two paid rest intervals per day, not
exceeding 30 minutes, in order to complete this task.
 Working fathers are not provided paternity leave under the law.

10. Gratuity Calculations
 Gratuity is given by the employer to an employee for the services
rendered by him. It can be paid provided certain conditions are met.
 Therefore, it is a sum of money paid to an employee at the end of a
period of employment.
 If the employee resigns of his or her own free will before completing
one year, then they will not be entitled to any gratuity pay.
 The worker is entitled to a gratuity for the served fraction of a year,
provided that he completes one year of continuous service.
 The end of service gratuity is calculated on basis of last wage which
the employee was entitled to, namely the basic salary. Hence, it will
not include allowances such as housing, conveyance, utilities,
furniture etc.

11.  Article 132
 The worker having spent one year or more in continuous service
shall be entitled to an end of service gratuity upon the
termination of his service. The days of absence from work
without pay shall not be included in the calculation of the
period of service, and the gratuity shall be calculated as
follows:
 1 - The wage of twenty one days for each of the first five years
of service.
 2 - The wage of thirty days for every additional year.
 Always provided that the total gratuity does not exceed the
wage of two years.

12. Calculations of gratuity pay
 1. Under limited contract
 In the event where the employer terminates a limited
contract, calculation will be as follows:
 If an employee has served for less than 1 year, he is not
entitled to any gratuity pay.
 If an employee has served more than 1 year but less than
5 years, he is entitled to full gratuity pay based on 21
days' salary for each year of work.
 If an employee has served more than 5 years, he is
entitled to full gratuity pay based on 30 days' salary for
each year of work.

13.  2. under unlimited contract
 In the event where the employer terminates an unlimited
contract, calculation will be as follows:
 If an employee has served for less than 1 year, he is not entitled
to any gratuity pay.
 If an employee has served more than 1 year but less than 5
years, he is entitled to 21 calendar days' basic salary for each
year of the first five years of work.
 If an employee has served more than 5 years, he is entitled to
30 calendar days' basic salary for each additional year, provided
the entire compensation does not exceed two years' pay.

14.  In the event where the employee under an unlimited contract
resigns, calculation will be as follows:
 If an employee resigns before completing 1 year of service, he
is not entitled to any gratuity pay.
 If an employee has served between 1 and 3 years, he is entitled
to one third (1/3) of 21 days' basic salary as gratuity pay.
 If an employee has served between 3 and 5 years, he is entitled
to two-thirds (2/3) of 21 days' basic salary as gratuity pay.
 If an employee has served more than 5 years, he is entitled to
full 21 days' basic salary as gratuity pay.

15. Full and Final settlement
 Upon termination of the employment contract, an employee will be entitled
to the following settlements:
 1. A notice period, or any amount due in lieu of the notice period in the case
of a contract of unspecified term.
 2. In the case of a contract of unspecified term, compensation for abusive
dismissal if the contract was terminated by the employer for grounds
unrecognized by the UAE Labour Law as justifiable cause for such
termination.
 The amount of the compensation will not exceed the employee’s
remuneration for three months calculated on the basis of the last
remuneration she was entitled to, unless the contract contains a provision to
the contrary.

16.  3. In the case of a contract of specified term, compensation for abusive
dismissal if the contract was terminated by the employer for grounds other
than those provided for in Article 120 of the UAE Labour Law.
 The amount of the compensation will not exceed the aggregate remuneration
due for a period of three months or the residual period of the contract
whichever is shorter, unless the contract contains a provision to the contrary.
 4. Payments for overtime or any unpaid balance of wages. (Allowances which
are pending for payment)
 5. Payments equivalent to the balance of unutilized leave or any part thereof.
 6. End of service gratuity calculated on basis of the period of service.
 7. Repatriation expenses as per the Law or the employment contact.
 8. Any fines or advances taken are deducted from this.
 If the employee owes any money to the employer, the employer may deduct
the amount from the employee's gratuity.

17. Medical Insurance for Employees
 In accordance with Article 96 of the Federal Law No. 8 of 1980 regulating
Employment Relations in the UAE (the 'Employment Law'), which states: "An
employer shall provide his employees with medical care facilities
corresponding to the standards laid down by the Ministry of Labour and Social
Affairs in co-operation with the Ministry of Health."
 Based on the aforementioned provision of the Employment Law your employer
should not deduct the cost of health insurance from your final settlement
amount.

18. Division of Salary
 Total Salary:
 The total salary or remuneration includes the basic salary and the allowances
of the employee agreed upon by the employer and employee.
 Basic Salary
 Article 1 of the Labour Law defines "Basic Wage" as "the wage specified in the
labour contract during its validity between the two parties. Allowances of
whatever kind are not included in this wage."
 Normally, the basic salary component may range between 30% to 40 per cent
of the total remuneration paid by the employer to the employee.
 The employer cannot unilaterally and at its own discretion reduce the
remuneration in the employment contract filed with the Ministry of Labour,
unless there is a written consent by the employee.

19.  House Rent Allowance
 Employers used to provide housing for employees they recruited to come live
in Dubai. But as time has progressed the trend is favouring giving housing
allowances (cash) and allowing the employee to choose where they want to
live.
 Due to high rents, employees end up paying more out of pocket. So make sure
you research rents and what you are getting in allowance to be able to
properly evaluate your offer.

20.  Transportation Allowance
 Employers are known to pay for fuel for the most part. Some employees are also given
company cars (again depending on the nature of your position). Managerial employees
can sometimes receive luxury (Mercedes and BMW) cars from their companies.
 Company Transportation- Buses.
 Employers may opt to pay you a fixed cash stipend or provide the actual cars and a fuel
card to swipe at the pump. If your job requires travel, you will be paid the expected per
diem or your travel will be 100% covered (just depends on your employer’s
preference).
 Airfare Back Home
 It is not uncommon to receive one free trip back to your home country on an annual
basis. For managerial level employees, often times a free ticket is also thrown in for
their family members. Many employees choose to use this with the generous annual
leave benefit. This is either paid in cash or paying for the actual ticket.

21.  Other Allowances
 Education Allowance for Kids
Most often you can expect a fixed tuition allowance per child per year. Managerial
levels and above often send their kids abroad for school. This is all covered by
employers in Dubai.
 Furniture Allowance
If your housing is provided for, chances are the furniture will come with it. Some
employers simply offer a cash stipend so you can buy what you need. If you are renting,
you can choose from furnished and non-furnished apartments (non-furnished are
obviously cheaper). It is common not to receive any furniture allowance.
 Utility Bills
Electricity, water, yard care, phone bills, etc are sometimes subsidized, reimbursed or
free depending on your position. If your employer is providing your housing, chances
are all your bills will be paid for as well. If you are renting and paying for it, you may
or may not be offered part of full payment for utility bills. Something to consider when
negotiating your total salary structure.