UAE Ministry of Labour written off Fines on unrenewed labour cards

The Ministry of Labour has written off around Dh1 billion in fines accumulated over 10 years on non-renewal of labour cards in the private sector, a top ministry official said.

Humaid Bin Deemas Al Suwaidi, Executive Director at the Labour Ministry, said it has decided to implement the Cabinet decision aimed at reducing fines accumulated on labour cards not renewed between 2000 and December 31, 2010.

Written off

The ministry has written off 80 per cent of the total amount of fines, owed by 28,500 companies, which has reached Dh1.25 billion.

He added that the ministry had decided to calculate a fine of Dh2,000 on each labour card that expired before May 31, 2005. Al Suwaidi said there are 30,000 such cards and the fines originally assessed on them is around Dh1.1 billion.

The ministry will impose a fine of Dh5,000 on each labour card expired between May 31, 2005 and December 31, 2010.With 17,000 cards having expired in this period, the ministry had assessed total fines at Dh150 million.

Al Suwaidi said that "the decision is aimed at encouraging companies in private sector to legalise their status," adding that the move integrates the new decision with the previous decision announced by the ministry to reduce the transfer fees to ensure that companies don't employ staff illegally because of high fees or fines

UAE Labour ministry reduced employment fee for companies

Employment fee for facilities under Category A has been reduced from Dh11,000 to Dh300 a year. Transfer fee for companies under Category B, which earlier paid Dh11,500 for three years has been reduced to Dh1,500 for two years. Firms under Category C, which shelled out Dh12,000 now need to pay just Dh2,000 for two years.

The ministry cancelled all fees for employment of nationals in the private sector to boost emiratisation. Similarly, fees for recruitment of GCC nationals have also been lifted.

The ministry stressed the need for all workers to have a valid labour card and valid residency visa with the relevant signatures of the authorities. Even those unregistered until now, including government workers, students, children below 18 years, and spouses of citizens

UAE retirement age increased from 60 to 65

New norm part of the labour rules revision to help expatriates who otherwise retire at 60

Expatriates in the UAE have been given an additional five years of service with the Ministry of Labour revising the retirement age from 60 to 65.

Part of the widespread changes in the country's labour law will allow expats to secure visas up to the age of 65 years, Arabian Business reported quoting an unnamed official of the ministry.

“The retirement age before was 60, now it’s 65. They raised the retirement age [under the new legislation,” the official told the website.

The ministry had last week announced the decision to reduce the validity of labour cards to two years from three, starting from January 1, 2011. This practically gives expat workers the freedom to switch jobs without a no-ojection certificate (NoC) from the employer.

The previous law had ensured workers get a six-month ban forcing them to leave the country if their employers refuse the NoC.

The UAE Ministry of Labour divided establishments in to Three Groups- Resolution effective from January 2011

The UAE Ministry of Labour has divided establishments in groups based on the extent of their compliance with labour legislations, systems and standards, cultural diversity approach and on-time payment of salaries, provision of accommodation, and emiratisation quota.

The changes were made by Minister of Labour Saqr Gobash who issued resolution number 1187 of 2010 on regulations and criteria of classification of firms in implementation of the cabinet resolution number 26 of 2010 which was issued on August 11, 2010. Article 10 called for introducing practical and real mechanisms for voluntary Emiratisation.

Gobash said his ministry is keen to create a balanced working environment that stimulates economic growth and facilitates the process of productivity through a sound management of skilled human capital. "Our ethical and legal mandate requires us to strive to explore and roll out mechanisms that embody the sincere commitment of the political leadership to put in place a safe and stable environment and to protect rights of all categories in the communit," he said.

The new system replaces the current cultural diversity-focused classification which has been implemented since 2005.

"The new classification system was designed after consultation with prominent local labour market experts and embraced best practices from experiences of international community and neighboring countries," the minister added.

"While the old system revolved primarily on the cultural diversity mix in firms, the new one allows the firm to move higher on the classification scale giving them slew of rewards based on their commitment to certain standards like emiratisation, wages and housing," he indicated.

He said the new resolution divides companies into three main categories: The first group which tops the scale; The second which includes the current three categories A,B and C and the third one which along with the first are the newcomers.

The resolution ranks the firms if they meet the following conditions:

1. The percentage of workforce should not be less than 20 from the professional levels (1-2-3) of the total manpower.

2. The wage of a worker should not be less than Dh12,000 if he is in level 1, Dh7,000 in 2 and Dh5,000 in 3.

3. Emiratisation percentage should not be under 15 in these levels.

The creation of this first group aims at opening up new professional jobs for Emaratis and avoid 'mock' emiratisation," he said.

For the second group, the resolution arranged firms as A,B and C according to cross-cultural policy. A company is in Group A if it does not commit itself to this policy by at least 25 per cent. A non-compliance of 25 to 50 will place the company in Group B and C if the percentage crosses the 50 mark.

The resolution grants firms until the January 1, 2011 to correct their status.The minister added the resolution introduced a black point and penalty system against offenders which can downgrade firms to a lower group and drop black points after one year.

As for the third group, the resolution indicated that a firm in the second group which accumulates 100 black points will be downgraded to the third group. A company can be placed in this group if it is convicted by a court for recruiting infiltrators, commits trafficking in persons, provides wrong information regarding wages protection system and fails to observe emiratisation policy. Financial fines on any of these irregularities can range between Dh15.000-20,000.

The Ministry of Labour UAE announced minimum wage limit for different categories of workers

The Ministry of Labour on Saturday announced a minimum wage limit for different categories of workers, depending on their qualifications.According to new labour laws, employees under skilled class level 1 (those with a Bachelor's degree) should earn a minimum Dh12,000 a month.Diploma holders, who come under skilled class level II, should earn not less than Dh7,000 and workers who have passed high school should be paid a minimum salary of Dh5,000.

The ministry urged strict implementation of Wage Protection System (WPS) and called on companies to adhere to the salary structure according to the amended classification.With a focus on emiratisation, the ministry has amended a few labour laws that stipulate establishments hire employees under three categories.

According to the new amendment, nationals should not be less than 15 per cent of the total staff of any company.

Similarly, the skilled class (inclusive of three levels) should not be less than 20 per cent of the total employee strength of any company.The ministry has also classified establishments according to the type of employees they hire.

Depending on the percentage of diversity among staff, companies now fall under three categories (first and second and third), and category II includes three levels (a, b and c).

A facility will fall under level (a) if the diversity among employees is at least 25 per cent; under level (b) if diversity among workers is between 25-50 per cent; and under level (c) if the diversity is 50 per cent or more.

A company can be upgraded to second level irrespective of the diversity provided the skilled class is not less than 20 per cent of total workforce. Similarly, companies can be downgraded if they violate labour laws, clarified Labour Ministry.