Emirates News Agency – UAE Pensions Authority raises awareness of incorrect contribution practices leading to penalties for private sector entities

ABU DHABI, 27th December, 2022 (WAM) — Private sector entities that do not pay monthly contributions or provide incorrect data for their UAE employees risk incurring additional penalties under the Federal Pensions and Social Security, as well as a Sentenced to prison law in some cases.

At the conclusion of the educational campaign for insured persons and their employed entities under the NAFIS scheme regarding the rights and obligations of the insured persons, the General Administration of Pensions and Social Security (GPSSA) stated that charges to insured persons a percentage in excess of the due Proportion of contributions or failure to pay in full will result in a penalty of AED 5,000 per insured person. The court would issue an immediate ruling requiring the entity to refund the excess amount to its covered employees.

“Employers will be fined for each UAE employee who is not registered with GPSSA and will be obliged to make retroactive contributions on his/her behalf and pay due contributions based on the employee’s date of employment,” GPSSA said in a statement.

According to the Pension and Social Security federal law, salary contributions are due at the beginning of each month and can be extended up to the 15th. Article 13 of the Act stipulates that monthly pension contributions are non-refundable. Therefore, any late payment of contributions beyond the specified date will result in the payment of an additional amount by the owner of the company/entity at the rate of 0.1% of the contribution due for each day of delay without warning, as per Article XIV.

Entities that pay contribution amounts based on incorrect wages to avoid paying contributions at a higher rate, or that fail to pay due contributions for some or all of their employees, will be deducted from the value of contributions due An additional 10% will be charged. Furthermore, if an entity sends incorrect data or fails to provide information on all acts considered illegal, employers face imprisonment and fines not exceeding Dh5,000 per employee.