From Gratuity to Growth: 15 Must-Know Details about The UAE’s End-of-Service Benefits Scheme

The United Arab Emirates (UAE) is stepping up its game to empower employees and bolster the job market with a brand-new End-of-Service Benefits Scheme. This voluntary initiative, implemented by the Ministry of Human Resources and Emiratisation (MoHRE) and the Securities and Commodities Authority (SCA), is set to revolutionize the traditional gratuity system for employees in the public and private sectors, as well as those in free zones. Let’s uncover the essential facts about this promising program.

UAE’s End-of-Service Benefits Scheme: Key Points

1. All-Inclusive Opportunity: The UAE’s End-of-Service Benefits Scheme is a game-changer for all employees in the UAE, regardless of their nationality. Whether you’re an expat or a proud UAE national, you can dive into this new opportunity.

2. Perks for Employers: Employers have much to gain from the scheme. It can be a game-changer for enhancing employee loyalty and productivity, freeing up businesses to focus on what they do best while saving on admin hassles.

3. Employee Benefits: Employees get to explore a treasure trove of investment options, creating a solid foundation for precise financial planning and securing their future in a thriving labor market.

4. Employer’s Role: Employers are entrusted with the task of picking licensed investment funds, deciding which employees join the scheme, and keeping the paperwork in check.

5. Subscription Know-How: Subscriptions make their way into the investment fund within 15 days of each month. There are two subscription types: basic for non-skilled workers and voluntary for skilled workers.

Also read: Tough Mudder Returns To Dubai With 15% Off Tickets

6. High-Risk Ventures: Skilled workers can ride the high-return wave by opting for investment portfolios with more risk or adding extra contributions. Employers are off the hook for any risk-associated losses.

7. Salary Split: The percentage of an employee’s monthly basic salary allocated depends on how long they’ve been with the company. The voluntary subscription can’t exceed 25% of the total salary.

8. Gratuity Gone Modern: The traditional end-of-service gratuity system takes a backseat for employees in the new scheme, with financial entitlements recalculated based on their service years.

9. Optional Participation: Joining the UAE’s End-of-Service Benefits Scheme is a personal choice for both employers and employees. Mandatory participation applies to employees selected by employers.

10. Withdrawing Contributions: Employees hold the keys to withdrawing part or all of their voluntary contributions and investment returns, while the basic subscription amount is only up for grabs upon employment termination.

11. Employer’s Right to Exit: Employers have the green light to exit the scheme under specific circumstances with the MoHRE’s nod.

12. Payment Pause: Employers can hit the pause button on basic subscription payments temporarily when specific situations arise.

13. Fund Handling: The SCA gets to grant licenses to investment service providers or fund managers. Employees have a smorgasbord of investment options, including safe capital-guaranteed portfolios, more adventurous risk-based investments, and Shariah-compliant funds.

14. Switching Managers: Employers can give their fund manager the boot and move their subscriptions to another investment fund. No need to worry about fees!

15. Manager’s Duties: Fund managers must ensure a variety of investment options, handle significant funds, and keep employers and beneficiaries in the loop with semi-annual account statements.

Also read: Contemporary Adaptation Of Shakespeare’s Macbeth Takes Center Stage At Dubai Opera

The UAE’s End-of-Service Benefits Scheme is a game-changing opportunity for employees and employers alike. With a diverse range of benefits and a modern approach to financial security, this initiative demonstrates the UAE’s commitment to building a robust job market and securing the financial well-being of all participants. It’s a step toward a more prosperous labor market for everyone.