Blogs & Articles

Fair Compensation Requirements

1. WagesWhile there is no official minimum wage in the UAE private sector, fair compensation should reflect the job role, industry standards, and living costs. Wages must be paid timely and in full as per the employment contract, as stipulated by the UAE Labor Law.

2. Mandatory Employee Benefits

• Health Insurance: Under Dubai Health Insurance Law No. 11 of 2013, employers must provide health insurance coverage for all employees.
• Living Conditions: Article 26 of the UAE Labor Law mandates that employers provide suitable accommodation if included in the employment contract. These accommodations must meet the health and safety standards set by the Ministry of Human Resources and Emiratisation (MOHRE).

Protecting Against Illegal Practices

1. Visa Promises and Passport Retention

• Legal Obligations: Employers must process and provide work visas for employees. Retaining an employee’s passport is illegal unless for visa processing purposes and must be returned promptly. Refer to Federal Decree-Law No. 33 of 2021 on the Regulation of Labor Relations.
• Practical Advice: Employees should ensure they receive their visa before starting work and verify job offers through legal channels.

2. Work and Living Conditions

• Permissible Conditions: Employers must comply with health and safety standards, as outlined in Articles 91 to 101 of the UAE Labor Law, ensuring safe working environments and fair working hours. This includes providing proper ventilation, lighting, hygiene facilities, and ensuring machinery and equipment are safe to use. Employers are also responsible for implementing measures to prevent workplace accidents and occupational diseases.
• Working Hours and Breaks: The UAE Labor Law sets the maximum working hours at 8 hours per day or 48 hours per week. During Ramadan, working hours are reduced by two hours per day. Employees are entitled to a break after five consecutive hours of work.
• Overtime: Overtime work should be compensated at a rate of 125% of the regular hourly wage, and if it occurs between 9 PM and 4 AM, the rate is 150%.

Wage Protection System (WPS)

• Overview: The Wage Protection System (WPS) was introduced by MOHRE to ensure timely and full payment of salaries. It mandates that all employers pay their employees through approved financial institutions, ensuring transparency and adherence to contractual agreements.
• Compliance: Employers must register with the WPS and submit payroll details through the system. Failure to comply with WPS requirements can result in fines, suspension of company operations, and other legal actions.
• Employee Protection: The WPS allows MOHRE to monitor salary payments and address any delays or discrepancies. Employees can file complaints if they do not receive their salaries on time.

Visa Promises and Overstay Fines

1. Promised Visa Not Provided

• Employer Responsibilities: If an employer promises a visa but fails to provide it, leaving the employee with overstay fines, this is a serious violation of UAE labor laws. Employers are legally obligated to regularize the employee’s status.
• Legal Recourse: Employees should report this to MOHRE. The employer can be penalized with fines, suspension of operations, and other legal actions.
• Fines and Penalties: Overstay fines accrue daily, and the employer may be required to cover these costs if found negligent.

Punishments for Illegal Practices

• Legal Consequences: Employers violating labor laws, such as withholding visas, underpaying, or providing unsafe conditions, face fines, imprisonment, and business license revocation under the UAE Penal Code and the Labor Law.
• Reporting Mechanisms: Employees can report violations to MOHRE through their website or visit Tasheel service centers.

Practical Tips for Employers

1. Adhere to Legal Requirements

• Ensure compliance with all relevant UAE labor laws, including timely visa processing, fair wages, and provision of health insurance.
• Familiarize yourself with Articles 91 to 101 of the UAE Labor Law to maintain safe working conditions.

2. Maintain Clear Communication

• Keep transparent and documented communication with employees regarding their rights, job expectations, and any changes in employment terms.

3. Utilize WPS

• Register and comply with the Wage Protection System (WPS) to ensure timely and full payment of salaries, minimizing the risk of legal issues.

4. Regular Audits

• Conduct regular internal audits to ensure compliance with labor laws and rectify any potential issues proactively.

5. Legal Consultation

• Regularly consult with legal experts to stay updated on any changes in labor laws and ensure your business practices remain compliant.

Conclusion

Understanding fair compensation, mandatory benefits, and legal obligations helps protect both employers and employees in Dubai. Compliance with UAE labor laws ensures a fair and productive work environment. For detailed legal assistance, contact a qualified professional.

‍