Rivermate | United Arab Emirates flag

United Arab Emirates

Benefits and Entitlements Overview

Learn about mandatory and optional employee benefits in United Arab Emirates

Mandatory benefits

In the United Arab Emirates (UAE), a robust legal framework is in place to ensure basic protections for workers through mandatory employee benefits.

End of Service Gratuity

All employees who complete at least one year of service are entitled to a gratuity payment upon termination of their employment. The gratuity is calculated based on the employee's basic salary and their total length of service. It's typically 21 days' worth of basic salary for each year of service for the first five years, and 30 days' worth for every additional year thereafter. However, there are some exceptions to eligibility, such as termination due to gross misconduct by the employee.

Annual Paid Leave

UAE law mandates a minimum of 30 calendar days of paid annual leave for all employees who have completed one year of continuous service. Some companies may offer more generous leave policies, exceeding the minimum required by law. In addition to annual leave, employees are also entitled to paid leave on all UAE public holidays. The number of public holidays can vary slightly each year.

Wages and Payment

Employers are legally obligated to pay employee salaries at least once a month, on a specific date agreed upon in the employment contract. While there is no federally mandated minimum wage in the UAE, individual emirates may implement their own minimum wage requirements. If an employee works beyond the standard working hours, they are entitled to overtime pay calculated at a specific rate mandated by law.

Workplace Safety

Employers have a legal duty to ensure the safety and health of their employees in the workplace. This includes providing a safe working environment, proper training on safety procedures, and personal protective equipment when necessary.

Enforcing Employee Rights

The UAE Ministry of Human Resources and Emiratization (MOHRE) is responsible for enforcing employee rights and ensuring compliance with labor laws. Employees who believe their rights have been violated can file a complaint with the Ministry.

Optional benefits

In the UAE, many employers go beyond mandatory benefits to attract and retain top talent. Here's a glimpse into some of the most common optional employee benefits offered in the region:

Financial Security and Career Development

  • Pension Plans: Some employers offer private pension plans to contribute to employees' long-term financial security after retirement.
  • Performance-Based Bonuses: Companies may offer bonuses tied to individual or company performance to incentivize employees and reward high achievers.
  • Stock Options or Profit Sharing: Some companies, particularly in specific sectors, may offer stock options or profit-sharing plans to align employee interests with company success.
  • Tuition Reimbursement: Employers seeking to support professional development may offer to reimburse employees for educational expenses related to job-relevant skills or qualifications.

Enhancing Work-Life Balance and Well-being

  • Flexible Work Arrangements: Modern companies in the UAE may offer flexible work arrangements like remote work options or compressed workweeks to cater to individual needs and promote a healthy work-life balance.
  • Additional Paid Leave: Building on the mandated annual leave, some employers offer additional paid vacation days or sick leave to provide employees with more time for personal needs and relaxation.
  • Wellness Programs: Companies may invest in employee well-being by offering on-site fitness facilities, gym memberships, or health and wellness programs.
  • Relocation Assistance: For expatriate employees, companies may offer relocation packages that include assistance with visa processing, finding housing, and settling into their new environment.

Additional Perks and Benefits

  • Company Cars or Transportation Allowances: In some cases, employers may provide company cars or transportation allowances to ease employee commutes, especially for specific roles.
  • Meal Vouchers or Allowances: To offset meal expenses during working hours, some employers may provide meal vouchers or a dedicated allowance.
  • Family and Lifestyle Benefits: Certain companies may offer childcare subsidies, family health insurance coverage, or discounts on entertainment or educational activities.
  • Social and Recreational Activities: Employers may organize team-building events, social gatherings, or recreational activities to foster a positive work environment and employee engagement.

Providing a comprehensive benefits package that goes beyond mandatory requirements can be a significant advantage for employers in the UAE. It not only attracts and retains top talent but also boosts employee morale, productivity, and loyalty. The landscape of optional employee benefits in the UAE is constantly evolving. By understanding these common offerings, employers can create attractive and competitive benefits packages that enhance employee satisfaction.

Health insurance requirements

In the UAE, the health insurance landscape operates with a two-tiered system for employees: mandatory coverage for expatriates and voluntary options for Emirati nationals.

Mandatory Health Insurance for Expatriates

Employer Responsibility

The UAE law mandates employers to provide basic health insurance coverage for all expatriate employees and their dependents under their sponsorship.

Coverage Details

The specific details of the mandatory health insurance plan, such as the level of coverage and network of hospitals, can vary depending on the employer's chosen plan. However, it must meet the minimum requirements set by the Dubai Health Authority (DHA) or relevant authorities in other emirates.

Exceptions

There may be exceptions for certain categories of employees on short-term contracts or those with visit visas.

Health Insurance for Emirati Nationals

Voluntary Coverage

Emirati nationals are not mandated to have health insurance.

Government Healthcare System

Emiratis have access to a government-funded healthcare system that provides subsidized medical care. However, this system may have limitations in terms of wait times or access to specialized treatments.

Optional Private Health Insurance

Some Emirati nationals may choose to obtain private health insurance for more comprehensive coverage or quicker access to private healthcare facilities.

Who Provides Health Insurance?

Licensed health insurance companies operating in the UAE offer various health insurance plans catering to both mandatory and voluntary needs. Some employers may partner with specific insurance providers to offer group plans for their employees.

The Importance of Health Insurance

Having health insurance, whether mandatory or voluntary, is crucial for managing healthcare costs in the UAE. Medical expenses can be high, and health insurance can provide financial protection in case of illness or injury.

Retirement plans

The UAE offers a diverse approach to retirement planning, combining government and private options. Here's a breakdown of the available retirement plans for employees:

End of Service Gratuity (EOSG): A Safety Net

EOSG is a guaranteed payment for all UAE employees who complete at least one year of service. This lump sum payment acts as a form of severance pay, calculated based on an employee's basic salary and their total length of service. The gratuity increases with each year of service. EOSG is not a dedicated retirement plan, but it provides a financial cushion upon leaving a job.

Voluntary Pension Plans: Building Your Nest Egg

While the EOSG offers a starting point, many look for additional security. Individuals can contribute to voluntary pension plans offered by licensed financial institutions in the UAE. These plans allow for long-term savings and investment towards retirement goals. Some companies offer employer-sponsored pension plans. These plans can vary in structure, with some offering defined benefits based on pre-retirement salary and others offering defined contributions with potential employer matching. Choosing a suitable pension plan depends on factors like age, risk tolerance, and desired retirement lifestyle. Consulting a financial advisor can be beneficial.

Personal Savings and Investments: Taking Control

For those seeking more control over their retirement savings, building a retirement nest egg can begin with regular contributions to savings accounts that offer interest on your deposits. Individuals can invest in stocks, bonds, or real estate through brokerage accounts, allowing for potentially higher returns but also carrying greater risk.

A Tailored Approach is Key

The ideal retirement plan is a personalized strategy that considers your income, risk tolerance, and desired retirement lifestyle. A combination of the options mentioned above can be effective.

Additional Factors to Consider

For expatriates, understanding how double taxation treaties between their home country and the UAE may affect their retirement savings is crucial. There is no official retirement age in the UAE. However, obtaining a work visa after a certain age may become more challenging.

Rivermate | A 3d rendering of earth

Hire your employees globally with confidence

We're here to help you on your global hiring journey.