Retiring from private sector - UAE rules

Dubai today has a growing private sector that is attracting professionals from all countries. As per UAE laws, one can begin working from the age of 18 till the age of 60, and in special cases even up to 70 years. Although the retirement age varies from job to job, expatriates working in the private sector who are over 60 years of age require the approval of the Ministry of Labour.

From 2011 onwards, private sector employees can now get two year extensions to work after their retirement age, as compared to the previous one year extensions. Fees for two year extensions up to the age of 65 range from AED 500 for first category companies, AED 800 for second category A companies, AED 1,700 for second category B companies, AED 2,200 for second category C companies and AED 5,200 for third category companies. For employees over the age of 65, in addition to the fees mentioned above, an additional AED 5,000 is charged with the labour card being valid for two years.

Emiratis working in both the government and private sectors are eligible for pensions provided they have fulfilled certain conditions as stipulated by the General Authority for Pension & Social Security (GAPSS). These include: either reaching the retirement age of 60, or having worked for a minimum 20 years in total in government/private sectors, provided that he/she has submitted his/her resignation.

The government also guarantees a social security allowance for women working in local or federal government who are sole bread-winners for their Emirati children. Eligible women having Emirati children include divorcees, widows or those married to Emirati men who are disabled/unable to work. In case the husband cannot work because he is disabled, a medical certificate has to be shown. For cases, where the husband is unemployed, the woman must give a written declaration to this effect, to be eligible for the social security allowance.

While expatriates working in the government & private sector are not eligible for pension, they are eligible for end-of-service benefits also known as gratuity or severance pay.

Calculation of Gratuity/Severance Pay

According to Article 132 of the UAE Labour Law, a worker who has completed one or more years of continuous service shall be entitled to severance pay at the end of his employment. The severance pay shall be calculated as follows:

a. 21 days’ wage for each of the first five years of service

b. 30 days’ wage for each additional year of service provided always that the aggregate amount of severance pay should not exceed two year’s wage.

Severance pay shall be calculated on the basis of the wage last due, but shall not include whatever is given in kind, housing allowance, transport allowance, travel allowance, overtime pay, representation allowance, cashier’s allowance, children’s education allowance, allowance for recreational and social facilities and any other bonus or allowances (Article 134)

Deductions in Severance Pay

Where a worker under an indefinite term contract abandons his work at his own initiative after a continuous service of not less than one year and not more than three years, he shall be entitled to one-third of the severance pay. Such a worker shall be entitled to two-thirds of the said severance pay, if his continuous service exceeds three years up to five years and to the full severance pay if it exceeds five years. (Article 137)

Where a worker under a definite term contract abandons his employment at his own initiative before the expiry of his contract period, he shall not be entitled to severance pay, unless his continuous period of service exceeds five years. (Article 138)

Provident /Pension Fund

Where the firm has a provident fund for the workers and the rules of the fund stipulate that whatever the employer pays into the fund for the worker’s account is in discharge of his legal obligation in respect of severance pay, the worker shall be paid the savings balance in his account or the severance pay due the Law, whichever is greater. Where the rules of the fund do not stipulate that the amounts paid by the employer are in discharge of his legal obligation towards the severance pay, the worker shall receive whatever is due to him in the provident fund in addition to the statutory severance pay. (Article 140)

Where a firm has a retirement fund, insurance or similar scheme, a worker who is entitled to a retirement pension may opt for treatment under the said pension or severance pay or under the pension or insurance scheme, whichever is more advantageous to him. (Article 141)

To ensure that you receive your rightful pension benefits, all retirees and eligible pensioners are required to regularly update their data with GPSSA. You can contact GPSSA on Toll free 800-10 from any emirate between 7.30 am and 5 pm.

UAE Domestic Workers Law: Ultimate Guide to Rights, Penalties, and Contracts

The UAE has fundamentally reformed its domestic labor sector, replacing old drafts with a comprehensive legal framework aligned with international labor standards. Overseen by the Ministry of Human Resources and Emiratisation (MoHRE), these laws strictly regulate the relationship between domestic workers, employers, and recruitment agencies to eliminate exploitation and ensure decent living and working conditions.

1. Golden Rules of the UAE Domestic Labor Law

The law enforces strict mandatory baselines for all domestic work contracts. The absolute non-negotiables for employers include:

• Recruitment Fees: It is strictly illegal for an employer or agency to charge a domestic worker any direct or indirect recruitment fees. The employer must bear all hiring costs.

• Prompt Payment: Wages must be paid in full at least once a month. Payment must be documented via approved channels (such as the Wages Protection System).

• Rest and Leave: Workers are legally entitled to one paid weekly day off. They also receive 30 days of annual leave, and the employer must provide a round-trip flight ticket home every two years.

• Sick Leave: Domestic workers are entitled to up to 30 days of sick leave per year (the first 15 days are fully paid; the next 15 days are unpaid).

• End-of-Service Gratuity: Workers who complete one or more years of continuous service are entitled to a severance payout calculated as 14 days' basic wage for each year of service.

2. Expanded Categories of Domestic Workers

The scope of protection extends far beyond traditional roles. The law specifically covers 19 distinct professions when employed within a private household:

Category	Covered Professions
Household Care & Management	Housemaid, Housekeeper, Nanny/Babysitter, Cook
Private Education & Health	Private Teacher, Private Tutor/Coach, Private Nurse
Estate & Logistics	Family Chauffeur (Driver), Watchman/Security Guard, Private Sailor, Private PRO, Agriculture Engineer
Specialized & Agricultural Care	Household Farmer, Household Shepherd, Horse Groomer, Falcon Carer & Trainer

3. Legal Consequences and Hefty Fines

The UAE enforces strict penalties and fines to deter illegal practices and protect both parties.

Penalties for Recruitment Agencies

Recruitment agencies face severe crackdowns if they fail to perform due diligence.

• Fines ranging from AED 50,000 to AED 200,000 apply if an agency recruits a worker under the age of 18, fails to properly inform the worker of contract terms before arrival, or refuses to provide a replacement worker or refund fees if the worker fails probation.

Penalties for Employers and Third Parties

• Employing Unlicensed Workers: Hiring a domestic worker without a valid work permit, or absconding a worker from another employer, carries a massive fine between AED 50,000 and AED 200,000.

• Scope of Work Violations: Assigning a worker duties completely outside the scope of their standard contract can result in fines up to AED 10,000.

• Filing False Absconding Reports: If an employer falsely reports a worker as "absconded" (missing from work) to avoid paying dues, they face a fine of up to AED 5,000.

4. Resolving Disputes Legally

To ensure vulnerable workers can access justice, all court cases filed by domestic workers are entirely exempt from court fees at all stages of litigation.

If a dispute arises over wages, working conditions, or contract breaches, neither party can go straight to court. The issue must first be submitted to MoHRE. The ministry will attempt an amicable settlement. If a settlement cannot be reached within the specified legal timeframe, the matter is officially referred to the specialized labor courts for an expedited ruling.

#UAE #UAELaborLaw #DomesticWorkersRights #MoHRE #Dubai #AbuDhabi #WorkersProtection

UAE, India fixes double taxation avoidance agreement issues

An amended double taxation avoidance agreement (DTAA) between the UAE and India is likely to plug the loopholes in a previous agreement that enabled tax authorities in India to sometimes unnecessarily go after non-resident businessmen and individuals for alleged tax evasion, say experts.

India and the UAE on Monday signed agreements to amend the double taxation avoidance treaty that will pave the way for greater sharing of tax-related information. The amendments to the treaty were signed during a India-UAE Joint Commission meeting in Abu Dhabi presided over by Minister of Foreign Affairs Shaikh Abdullah Bin Zayed Al Nahyan and his Indian counterpart S.M. Krishna.

The previous DTAA was non-operative in India as individuals residing in the UAE aren't subjected to income tax and, therefore, Indian individuals couldn't furnish proof to the Indian tax authorities of any tax deductions in the UAE.

"The amended DTAA allows for exchange of information about tax matters," Indian ambassador to the UAE, M.K. Lokesh told Gulf News. With the double taxation avoidance treaty being amended, the article on exchange of information has been updated to bring it on par with internationally accepted standards.

This allows for banking information as well as any information without any domestic tax interest to be shared.

Under the Income Tax Act 1961 of India, there are two provisions, Section 90 and Section 91, which provide specific relief to taxpayers to save them from double taxation. Section 90 is for taxpayers who have paid the tax to a country with which India has signed DTAA, while Section 91 provides relief to taxpayers who have paid tax to a country with which India has not signed a DTAA.

When there is a DTAA in place, capital gains arising from the sale of shares are taxable in the country of residence of the shareholder and not in the country of residence of the company whose shares have been sold.

Therefore, a company resident in the UAE selling shares of an Indian company will not pay tax in India. Since there is no capital gains tax in the UAE, the gain will escape all tax.

"Making it easier for investors across globe to buy Indian equities could be one way of bridging the [fiscal] gap and DTAA will prompt more investment flows,

Magnitude 8.9 quake hits Indonesia, Tsunami warning issued

Massive earthquake measuring 8.9 on the Richter scale rocked Indonesia on Wednesday afternoon. Indonesia's geophysical agency issued tsunami warning following the quake whose epicentre was in Aceh. The Pacific Tsunami Warning Centre issued Indian Ocean-wide tsunami warning.

Tremors were also felt in Kolkata, Chennai, Bangalore, Kochi, Thiruvananthapuram, Patna and several other cities on the eastern coast of India.

No family visa cancellation required for job change in UAE

Hi,am sponsored by my husband and we both have Dubai visa.I came here on 12th December 2011.But now my husband got a new job in Sharjah Airport free zone.so he need to change his visa.How can i hold my visa and do we need to submit 2 bedroom contract.I am looking forward for your detailed valuable advice regarding this as early as possible.
Thank You. 
Mehriya

Answer :

The general immigration practice in the United Arab Emirates requires expats switching employers not only to cancel their own residence visas but also the visas of everyone under their sponsorship, be it spouses, children or housemaids. It is only after cancellation is arranged that expat may apply for the visas sponsored by the new company. General directorate of residency and foreigners affairs (DNRD) residence visas of persons under sponsorship may stay in place and remain valid for the originally determined period of time, regardless of the sponsor’s visa change. The employee or resident must apply to the NRD (before the cancellation procedure) for not cancelling the visas of members of his family or those under his sponsorship. He should attach the 5,000 dirhams bank guarantee, the new employment permit issued by the Ministry of Labour to the new sponsor, and the job offer letter from the new employer. The original passports and deposit is kept by the DNRD until the new visa is issued. This sum can be refunded once the sponsor obtains the new residence permit. Residence permits of family members will be automatically transferred to the sponsor without the need to pay a fee.