Important New Laws Regarding DIFC End-Of-Service Gratuity Have Been Announced

Amendments to the DIFC Employment Laws and new regulations have been made to introduce a new end of service savings plan.

Employees under DIFC jurisdiction take note!

HH Sheikh Mohammed bin Rashid Al Maktoum Vice President and Prime Minister of the UAE and Ruler of Dubai enacted the Employment Law Amendment Law No. 4 of 2020 this week.

The current end-of-service gratuity payment regime, which has been in place since 2004, has been replaced with the new Qualifying Scheme workplace savings scheme and employers will soon need to start paying a minimum of 5.83% of your monthly wage to the scheme, on your behalf.

From February 1, employers must make mandatory monthly contributions to a professionally managed and regulated savings plan

New Employment Regulations have been released which outline the requirements for qualifying for the scheme, proving a commitment to regulation in the DIFC.

It’s worth noting any that any end-of-service benefits accrued under the current regime remain in place, and these can be paid into the new Qualifying Scheme.

Employees can make voluntary workplace savings contributions

On top of the mandatory monthly contributions to be made by employers under the Employment Law, employees can also make voluntary workplace savings contributions into the Qualifying Scheme.

The mandatory contributions have been set

5.83 % of monthly basic wage (for employees who have less than five years’ service), and 8.33 % of monthly basic wage for employees who have longer service

And there are exceptions for international institutions already contribution to pensions on behalf of their employees. More information here.