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Dec 23, 2021 2 min read

United Arab Emirates Payroll Outsourcing Alert

The new UAE Labor Law, that comes into effective on 2 February 2022, will also impact the overtime rules for the private sector employees. These changes have been summarized below:

  1. Employees will be prohibited to work more than five consecutive hours without at least a one-hour break, and no more than two hours of overtime is allowed in a day. Shift-based employees are exempt from this rule. If shift-based employees are required to work during an off-day, they must receive a day off in lieu or an overtime wage equivalent to their regular day pay with a 50% increase. In addition, employees cannot be made to work more than 144 hours during any three-week period.
  2. When employees are required to work more hours than their standard working hours, those additional hours will be treated as overtime and the employees must be paid their regular salary (basic salary plus all the contractual allowances) and an additional overtime payment of 50% of their regular salary.
  3. If an employee is required to work at any time between 10pm and 4am, the employee must be paid their regular salary plus an overtime payment of 50% of their regular salary.
  4. If an employee is required to work during an off-day, then the employee shall be either provided a day off in lieu or paid their regular salary with an additional 50% of their regular pay as an overtime payment.
  5. An employee may not be employed more than two consecutive rest days, except for the daily workers.

Mercans’ UAE Payroll Outsourcing Solutions

While Mercans’ UAE Payroll Outsourcing alerts will allow you to stay on top the latest development in UAE’s payroll regulations, you should still get in touch with Mercans’ UAE payroll outsourcing, compliance, PEO/GEO and BPO specialists for a free consultation on setting up fully compliant payroll and HR functions. Better yet, outsource your payroll and HR activities in UAE to Mercans and our UAE payroll outsourcing experts will ensure that your employees will always be paid on time and in accordance with the UAE regulations.

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