Rules for Housemaid Visa in UAE as Per Labour Law UAE Labours Blog from uaelabours.blogspot.com
Introduction
The United Arab Emirates (UAE) is known for its strict labour laws that protect the rights of employees. One of these laws is the Gratuity Law, which ensures that employees receive a gratuity payment when they complete their employment contract. This article will provide a detailed guide on how to calculate gratuity as per UAE labour law.
What is Gratuity?
Gratuity is a sum of money paid to an employee as a token of appreciation for their services rendered to an organization. In the UAE, gratuity is a mandatory payment that must be made by the employer to the employee upon completion of their employment contract. The amount of gratuity paid is calculated based on various factors such as the length of service, type of contract, and the employee's basic salary.
Calculating Gratuity
The calculation of gratuity in the UAE is based on the length of service of the employee. For employees who have completed one year or more of continuous service, they are entitled to receive a gratuity payment equivalent to 21 days of basic salary for each year of service. For employees who have not completed one year of service, the gratuity payment is calculated on a pro-rata basis.
Basic Salary Calculation
The basic salary is used as the basis for calculating gratuity in the UAE. It includes the regular salary paid to the employee and excludes any other benefits such as housing or transportation allowances. To calculate the basic salary, the total salary earned by the employee during the last 12 months of service is divided by 12.
Pro-Rata Calculation
If an employee has not completed one year of service, the gratuity payment is calculated on a pro-rata basis. This means that the employee will be entitled to receive a portion of the gratuity payment based on the length of service completed. For example, if an employee has completed six months of service, they will be entitled to receive half of the gratuity payment calculated based on the 21 days of basic salary for each year of service.
Service Calculation
The length of service is calculated based on the number of years, months, and days an employee has worked for an organization. The total number of days worked is divided by 365 to get the number of years, and the remainder is divided by 30 to get the number of months. The number of days remaining is then used to calculate the pro-rata gratuity payment.
Types of Contracts
The type of contract also affects the calculation of gratuity in the UAE. For fixed-term contracts, gratuity is calculated based on the total length of the contract. For unlimited-term contracts, gratuity is calculated based on the actual length of service.
Exceptions to Gratuity Calculation
There are certain exceptions to the gratuity calculation in the UAE. Employees who are terminated for misconduct or violation of company policies are not entitled to receive gratuity payments. Similarly, employees who resign before completing one year of service are not eligible for gratuity payments.
Conclusion
Gratuity is an important payment that employees in the UAE are entitled to receive upon completion of their employment contract. To ensure that the gratuity payment is calculated correctly, it is important to understand the various factors that affect the calculation, such as length of service, basic salary, and type of contract. By following the guidelines laid out in this article, employers and employees can ensure that gratuity payments are made accurately and in accordance with UAE labour law.
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