UAE Gratuity Law

What is Gratuity According to UAE Law?

Gratuity is money your employer must pay you when you finish working for them. The UAE labour law says this is your legal right. Think of it as a thank you payment for your hard work and loyalty.

The government made these rules to help workers save money for their future. Every employee who works for at least one year gets these benefits. It doesn't matter if you are from the UAE and another country and the law protects everyone equally.

UAE Labour Law Requirements For Gratuity

The UAE has clear rules about who gets gratuity and how much they should receive. These regulations come from Federal Decree Law No. 33 of 2021, which is the main labour law in the country.

According to this law, you must work from the same employer for at least one full year to get gratuity. If you quit and get fired before completing one year then you won't get any gratuity payment. These rules applied to limited and unlimited contracts.

The law also says your employer must pay your gratuity within 14 days after your last working days. This is a strict rule for employers which cannot delay this payment without a good reason.

Eligibility Criteria Under UAE Regulations

To qualify for gratuity benefits under the UAE law then you must meet these simple requirements.

First, you need to complete at least one continued year of service with your employer. This means 364 days of work, not including days when you were absent without pay.

Second, your employment must end properly. This can happen when you resign, your contract expires, and your employer terminates your employment. The law protects you in all these situations.

Third, you must have a valid labour contract registered with the Ministry of Human Resources and Emiratisation (MOHRE). The contract proves your employment relationship and makes sure you get legal protection.

The regulations are fair to everyone. It doesn't matter what job you do and how much money you earn. If you meet these basic requirements then you have the right to receive gratuity.

Calculation Method as Per UAE Law

The UAE law has a specific formula for calculating gratuity. This method is the same for everyone and cannot be changed by the employers.

For your first five years of work, you get 21 days of salary for each year. This is based on your basic salary, not your total pay package. After five years, you get 30 days of salary for each additional year.

How's how it works in simple terms:

Years 1-5: 21 days × basic salary × number of years
Years 6 and beyond: 30 days × basic salary × number of years.

The law also sets a maximum limit. Your total gratuity cannot be more than two years of your basic salary. This rule protects employers from paying too much while still giving workers fair compensation.

Legal Rights And Obligations

UAE regulations give you important rights regarding gratuity. You have to write the received full payment even if you resign voluntarily. Your employer can't reduce your gratuity amount unless you owe them money.

You also have the right to complain MOHRE if your employer doesn't pay your gratuity on time. This minister will investigate and help you get what you deserve.

However, you also have obligations under the law. You must complete your notice period and hand over your work properly. If you break your contract badly then your employer might reduce your gratuity by up to 50%.

The law requires both employers and employees to follow these rules. Employers must keep proper records of your service and calculate your gratuity correctly. They cannot make their own rules that give you less than what the law requires.

Recent Updates to UAE Labour Law

The UAE government regularly updates labour laws to make them better for workers. In 2022, they introduced new rules about gratuity that you should know about.

One important change in the 14 day payment rule. Before this update, employers had more time to pay gratuity. Now they must pay within two weeks of your last working days.

The government also created a new savings scheme as an alternative to traditional gratuity. This optional system lets employers invest your gratuity money in special funds. The goal is to protect your money from inflation and give you better returns.

These updates show that the UAE government cares about workers rights. They want to make sure the law stays fair and helpful for everyone.