UAE: How is gratuity calculated if wages change during service? – information

A KT reader wants to estimate the amount of income for 10 years

question: For the past 10 years, I have been working for a company based in Dubai. My (basic) monthly salary is Dh6,000 for 9 years. I got a promotion and the base salary for the past year was Dh9,000. How will my tip be calculated?

Reply: Based on your query, it is assumed that you are employed by a private mainland company located in Dubai. Therefore, the provisions of Federal Decree No. 33 of 2021 on the regulation of employment relationships (“Employment Law”) apply to you.

In the UAE, employees are entitled to a gratuity if they serve continuously for one year with the same private mainland company. During the first five years of continuous service, employees are entitled to 21 days of base salary for each year of service as a gratuity. An employee is entitled to 30 days’ base salary as a gratuity for each year of service with the same employer. According to Article 51, paragraph 2 of the Labor Law: “Foreign full-time employees who have served continuously for one year are entitled to severance pay. The basic wages are as follows:

One. (21) Wages for 21 working days per year for the first year of service.

b. (30) After each year of work, you can receive 30 working days’ wages. “

In addition, the employee’s gratuity is calculated based on the employee’s last basic salary. This is in accordance with Article 51, Item 5 of the Labor Law: “Without affecting the legal provisions on pensions and retirement benefits for employees of specific units, severance pay is calculated based on the last basic salary received. Foreign employees, For employees paid monthly, weekly and daily, the average daily wage for zero-wage employees is calculated.”

Since your current base salary is Dh9,000 as per the above mentioned law, your tip will be calculated accordingly. In addition, you are entitled to 21 days of base pay as an gratuity for the first five years of service with your employer and 30 days of gratuity for five years of service thereafter.

Ashish Mehta is the founder and managing partner of Ashish Mehta & Associates. He is qualified to practise in Dubai, the UK and India. For full details of his company, please visit: www.amalawyers.com. Readers can email their questions to: news@khaleejtimes.com or to Legal View, Khaleej Times, PO Box 11243, Dubai.

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