In a bid to curb late payments to departing employees, the Ministry of Human Resources and Emiratisation (MoHRE) has re-issued guidance confirming that private-sector employers must settle all end-of-service gratuity and outstanding wages within 14 days of contract termination. The reminder, published on 22 October, sets out the statutory formula—21 days of basic salary per year for the first five years, 30 days thereafter, capped at two years’ wages. Delayed or incomplete payments expose companies to labour claims, fines and the MoHRE’s electronic Wage Protection System (WPS) blocks, which can freeze new work-permit applications. For global mobility teams the clarification is a timely nudge: gratuity accruals must be reflected accurately in cost-projection tools, especially when budgeting lump-sum separation packages for international assignees. MoHRE is simultaneously promoting its voluntary Savings Scheme, which lets employers fund gratuity obligations via regulated investment funds, giving workers potential upside while guaranteeing access to their money on exit. Early adopters in the energy and tech sectors say the scheme reduces cash-flow shocks that occur when multiple long-service staff leave in the same quarter. Assignees should note that gratuity is calculated on UAE basic salary only; allowances such as housing or schooling are excluded unless specified in the contract. Mobility managers must therefore ensure offer letters spell out the definition of basic pay to avoid disputes at repatriation. Employees whose gratuity is delayed beyond 14 days can lodge a complaint through the MoHRE app or call 80060; cases are typically escalated to the Labour Court if unresolved within two weeks.
Source: Gulf News
