In brief

There have been a raft of developments to the UAE's employment regime over the last few months as the UAE government ramps up initiatives to attract and retain talent in the country. We have set out below a summary of the legal and commercial updates and key considerations for employers to comply with the changes and minimize potential business risk.

End of service gratuity – new alternative employee savings scheme introduced

What's new?

The UAE government has recently announced the introduction of an employee savings scheme as an alternative to the traditional end of service gratuity benefit.

Who is this change relevant to?

All private and public sector companies and free zone companies outside of the Dubai International Financial Centre (DIFC) and the Abu Dhabi Global Market (ADGM).

What do you need to know?

Legislation governing the proposed scheme is currently not available. As such, we have set out what we understand so far¹:

• The new scheme is not (yet) mandatory. It is an alternative to the current end of service gratuity benefit and therefore registration for employers is optional.
• The finer details of the scheme are yet to be confirmed. However, as we understand it currently, employers who enroll will be required to make regular contributions into the scheme on behalf of each of their eligible employees. It is expected that the level of employer contributions will be equal to the accrual rates under the current end of service gratuity scheme.
• The aim of...

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