The Ministry of Human Resources and Emiratisation (MoHRE) recently clarified who can receive end-of-service benefits in the private sector. Considering the changing work patterns like remote working, flexible hours, job sharing, etc., the department shared detailed guidelines about different work patterns.
This article explains how different working styles are considered for private sector employees in the UAE for gratuity calculation.
End-of-Service Benefits for Private Sector Employees
In the UAE, employers provide their employees end-of-service benefits at the end of their employment, which is called the gratuity. However, the employees must complete one year before they are eligible to receive the gratuity.
Type of Employment Covered
The MoHRE recently explained below the working styles covered under the gratuity scheme for private sector employees.
A full-time employee works for one employer throughout his daily working hours.
For employees with full-time contracts, the payment of gratuity is done based on the calculation given below:
- Employees with 1-5 years of service are entitled to a gratuity of 21 days’ latest salary for each year worked.
- Employees with over five years of service are entitled to a gratuity of 21 days of their latest salary for each of the first five years and an additional 30 days of their salary for every subsequent year up to the final month.
Under this arrangement, employees usually work for more than one employer. Divide the number of hours in the part-time employment contract per year with the number of hours in the full-time contract per year. Gratuity for part-time employees is calculated by multiplying the resulting percentage with the gratuity a full-time employee would be entitled to.
Gratuity calculations for remote work are the same as full-time or part-time employment. It depends on whether the contract is full-time or part-time.
Under this system, the employee is hired on a specified project, and the contract ends when it’s over. Employees working under this arrangement are entitled to gratuity as long as they have served over a year. Unless the contract is full-time, their gratuity will be calculated based on the hours they’ve served the company.
Under this system, employees don’t have fixed working hours or days. Gratuity calculations for flexible work are the same. It depends on whether the contract is full-time or part-time.
Job sharing is a working model where two or more employees work part-time to fill the shoes of a single full-time employee. The rules of gratuity remuneration here are the same as with part-time work.
MoHRE’s clarification on eligible working styles for private sector employees’ end-of-service benefits is a welcome change considering new working patterns.