The UAE government has introduced a new end-of-service benefits scheme, giving employers the option to enroll selected employees. Once enrolled, participation becomes mandatory for those employees. The scheme aims to attract and retain talented workers and allows employers to invest employees’ end-of-service gratuity in approved funds, potentially increasing their savings.
Any gratuity earned before joining the new system will be retained, and calculations will be based on the new system from the enrollment date. Employees can also make additional contributions to boost their investment returns. Skilled workers can choose their investment options, while unskilled workers will be part of a capital-guaranteed portfolio.
The Ministry of Human Resources and Emiratisation (MoHRE) and the Securities and Commodities Authority (SCA) are overseeing the implementation of the scheme. Employers can register through established committees or the ministry’s service channels. Employers must pay a monthly subscription based on the basic salary for the scheme to be effective. They also have the option to opt out, provided they meet specific criteria. This includes a minimum participation of one year, no outstanding fines or disputes, and ensuring no negative impact on employees’ rights and benefits.
