Minimum Wage
In accordance with the Labour Law, remuneration or wage include all the payments made to the worker on a yearly, monthly, weekly, daily, piece work, or production, or commission basis, in return for the work he performs under the contract of employment, whether such payments are made in cash or in kind. Basic remuneration is the pay provided for in the employment contract during its validity between both parties. Allowances whatsoever are not included in this remuneration.
The minimum pay should be enough for the employee's basic needs and to secure means of living. It is issued by a Federal Decree in accordance with the proposal made by the Minister of Labour and Social Affairs and approved by the Council of Ministers. The minimum wage and cost-of-living index is determined either in general or for a particular area or a particular profession.
On 15 November 2021, the Ministry of Human Resources and Emiratisation announced UAE’s new Labour Law, Federal Decree Law No. 33 of 2021. The new law replaced the current UAE Federal Law (No. 8 of 1980) on 2 February 2022.
According to new Labour Law, the minimum wage for workers is determined by the cabinet upon the proposal of the Minister and in coordination with the concerned authorities.
Source: §27 of Federal Decree Law No. 33 of 2021
For detailed information on current minimum wage rates, please refer to the section on minimum wages.
Regular Pay
Federal Law
Remuneration is any payment in cash or in kind, given to the employee on annually, monthly, weekly, daily, hourly basis, or by piece-meal or pro rata to the production or as a commission in consideration of his services under the employment contract.
The basic wage is defined as the wage specified under employment contract and is paid in monthly, weekly, daily, hourly or piecework basis and it does not include benefits in-kind.
The law defines wage as the basic wage plus the benefits in-kind and cash allowances provided that these amounts are prescribed in the employment contract or Labour Law. The law obliges employer to pay wages to employees on the due date set in the employment contract. Wages must be paid through the Wages Protection System or through any other system approved by the Ministry of Human Resources and Emiratisation. Upon request, the employer is obliged to provide proof of payment of wages to his workers. Legal actions can be taken against employer because of non-payment of the agreed wage. Wages are paid in national currency (UAE Dirham) or another currency (based on agreement of both parties in employment contract).
According to Labour Law, deduction from wages except the following cases is not allowed: for redemption of loans which should be a maximum 20% of the wage, amount deducted for contributions in bonuses, retirement pension, insurance, instalments of any social project worker has agreed to participate; penalties in case of violations by worker which should not exceed 5% of wage, and other cases as mentioned in the Labour Law. In all cases, the deduction from wages should not exceed 50% of wage.
The remuneration includes the cost-of-living allowance, and any benefit given to the employee in reward for his honesty or efficiency, provided always that these amounts are prescribed in the Company bylaws or in the employment contract, or normally practiced or granted to the employees, until they have been regarded by these as an integral part of the remuneration rather than a donation.
Employees employed on yearly or monthly bases are paid on monthly basis and all the other employees are paid fortnightly. Remunerations are paid in national currency (UAE Dirham) on working day at the work place. Employer is not authorized to transfer the employee from the monthly pay to the daily, weekly, hourly or piece work pay without the employee’s consent. It is not necessary to provide pay slips by the employer.
Effective from October 2016, companies employing more than 100 workers must pay wages within 10 days of its due date. In case they fail, the ministry will stop granting them any additional work permits starting from the 16th day from the date of delay. If the delay continues for one month, this means the company has entered into the refrainment phase, the ministry shall inform the judicial authorities and other related parties to take all necessary punitive measures against it. If an employer fails to pay wages for 60 days from the due date, then administrative fines follow. The administrative fines are Dh5,000 per worker’s delayed wage, up to a maximum of Dh50,000 in cases of multiple workers complaining about delayed wages for 60 days or more.
Employer must not make it compulsory for the worker to buy food or any other item from specific shops or products manufactured by the employer.
Sources: Ministerial Decree concerning the protection of wages (No. 739 of 2016); Cabinet of Ministers Resolution to Amend some Provisions of Cabinet of Ministers Resolution No. 27 of 2010 Regarding Fees and Fines on Services Provided by the Ministry of Labour (No. 10 of 2012); §22 and 25 of Federal Decree Law No. 33 of 2021; §16 of Cabinet Resolution No. (1) Of 2022 On the Implementation of Federal Decree law no. (33) Of 2021 regarding the regulations of labour relations.
Dubai International Financial Centre
The labour law differentiates between the “wage” and the “basic wage”. According to the law wages means all payments made to an employee in return for work done or services provided under the contract of employment. The law defines basic wages as the employee’s wage excluding any portion of an employee’s wage received in-kind or as allowance for housing, travel, currency exchange (cashier), children’s education, social and entertainment or any other type of allowance, bonus or commission payment, or overtime pay. The basic wage is calculated by taking into consideration the total number of calendar days in a year.
Employers are obliged to pay wages in a pay period, including vacation pay, at least once a month. Pay period means the hourly, daily, weekly, monthly or yearly period, where employees are paid by the hour, day, week, month or year; or the employees applicable pay period if an employee is paid on a flat rate, piece rate, commission or other incentive basis. Whether the wage period is one week or one month, wages must be paid within seven days of completion of wage payment period.
Pay slips are required under the law, providing the amount of gross wage paid, the amounts of any variable and any fixed deductions made from the wage and the purposes of the deduction. Employer can also provide the electronic access to the pay statement and the workers can take its print.
Employer does not provide the pay statement to the employees with fixed term employment contract of less than 30 days. There is no legal provision regarding method of payment and currency used.
Employer has no right to deduct any amount from the worker's wage without employees’ consent or otherwise specified by the law.
On termination of the employment, employer must pay wages and all the other amounts within fourteen days. If employer fails to do so, he/she is liable to pay the penalty equivalent to the last daily wage for each day the employer is in arrears. Employment law prohibits employers from recovering any recruitment costs. There are certain exceptions to this rule, for example if the employment contract is terminated within 6 months of its commencement.
Source: §15-21 of the DIFC Employment Law No. 2 of 2019
