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Wages

Wages

UAE labour law has not specified any standardized minimum wage rate or pay.

What is a basic wage?

A ‘basic wage’ is the wage that is specified in the labour contract and it is exclusive of all the allowances for example: accommodation, conveyance etc.

It is the requirement of law for companies to pay in lawfully circulating national currency and on the working day as mentioned in ARTICLE 55.

As per ARTICLE 56, companies are required pay monthly and on weekly basis or twice in a month in accordance with the number of days of service provided by an employee.

In accordance with ARTICLE 57, the daily salary calculation in UAE of employee shall be on the basis of average pay received for actual days of working for the period of six months prior to termination of contract.

ARTICLE 58, explains the settlement of remuneration of employees irrespective of its amount or nature. However it shall be in writing, by declaration or oath as evidence. Any agreement converse to this shall be considered void, even if made before the date of this law.

Also no employee shall be compelled to purchase any food product or commodities from specific shops which belong to the employer as highlighted by ARTICLE 59.

According to the conditions specified in ARTICLE 60, the employers are allowed to make valid and reasonable deductions to an employee’s salary. However the amount to be deducted has some limits.

  • In case of repayment of advances or amounts paid to employee in excess of his entitlement, no more than 10% of employee’s periodic payment shall be deducted from a single salary.
  • Additionally, any amounts due in execution of court judgment must not exceed one-fourth of employee’s pay; if an employee has numerous liabilities or creditors than, no more than half of their wages may be deducted. And the sum of money attached shall be divided pro rata among beneficiaries after payment of any legal provision amounting to one quarter of remuneration.
  • Fines imposed due to offences committed by employee
  • Installments payable by employees according to law from their remuneration such as social security and insurance schemes.
  • Installments in respect of any social scheme or other privileges approved by ministry department
  • Subscriptions of employees in the saving fund or advances scheduled for payment to the fund.

In relation to ARTICLE 61, if a physical damage, loss or destruction has been caused by employee due to violation of employer’s instructions or due to employee’s fault to the property of the organization, than up to five wages per month shall be deducted as compensation.

ARTICLE 62 explains that without the consent of employee the employer is not permitted to transfer his pay from monthly to weekly, daily or hourly basis.

ARTICLE 63 defines that Federal Decree in accordance with proposal made by the Minister of Labour and Social Affairs, approved by council of ministers, has fixed the minimum salary and the cost of living allowances payable generally or to certain area or specific profession.

Such minimum salary shall be sufficient to fulfill basic needs and secure means of living. The proposal is made by minister of Labour for reconsidering the minimum pay after consulting with competent authorities and agencies.

From the date of publication of specific decree in official Gazette, the minimum salary and its amendments shall come into operation as per ARTICLE 64.