Thinking about “Visa Cancellation And Final Settlement” in the UAE? You must be clued up on your entitlements, specifically your End of Service Benefits (EOSB). This is your final settlement under UAE labour law, and it’s more than just your last paycheck. It’s a financial package you’ll receive when you cease employment.
Whether you’re leaving voluntarily or Visa Cancellation, it’s important to know what you’re owed. From private sector worker perks to full-time contract benefits, the UAE has a lot in store for you. So, don’t be in the dark about your dues, delve into the details of the final settlement of UAE labour law and let’s ensure you get what you’ve earned.
Knowing Visa Cancellation And Final Settlement Payments
Diving into the details, you’ll find that understanding the final settlement payment under UAE labour law isn’t as complex as it may initially seem.
The calculation is based on the duration of your service and the nature of the termination. For less than a year of service, you’re not entitled to end-of-service benefits. However, after a year, these benefits kick in. They’re calculated on your last drawn salary, excluding “allowances“.
“You get 21 days’ salary for each year of the first five years, and 30 days’ salary thereafter. If you’re terminated, the calculation changes.” You must be aware of these nuances. The final settlement uae labour law is designed to protect your rights, ensuring you receive what you’re due when your employment ends.
final settlement UAE labour law calculation
A worker who has spent one year or more in continuous service shall be entitled to an end-of-service gratuity upon the termination of his service. The days of absence from work without pay shall not be included in the calculation of the period of service and the gratuity shall be calculated as follows:
- If a worker has served for less than 1 year, he is not entitled to any gratuity pay.
- If a worker has served for more than 1 year but less than 5 years, he is entitled to full gratuity pay based on 21 days’ salary for each year of work.
- If a worker has served more than 5 years, he is entitled to a full gratuity of 30 days’ salary for each year of work following the first five years.
“In all cases, the total gratuity shall not exceed the wage of two years.”
|Less than 1 year
|No gratuity pay
|21 days’ salary for each year of work
|More than 5 years
|30 days’ salary for each year (after 5 years)
|Total not to exceed the wage of two years
Private Sector Worker End of Service Benefits Benefits
Continuing from the final settlement benefits, as a private sector worker in the UAE, you’re also entitled to specific benefits under the labour law. These benefits differ based on the type of contract you have and the length of your service.
The table below breaks down these benefits:
|Over 1 Year
|Under 1 Year
If you’re on an unlimited contract, you’ll receive an end-of-service gratuity. Meanwhile, those on a limited contract will receive severance pay. If you’ve served more than a year, repatriation expenses are covered. Unfortunately, if your service is less than a year, you’re not entitled to any benefits.
End of service benefits under full-time contracts
Conclusion of employment benefits for full-time contracts in the United Arab Emirates (UAE) differ for UAE nationals and foreign workers in the private sector. For Emirati employees, the regulations governing pensions and social securities in the UAE determine their end-of-service benefits.
By “Article 51 of the UAE Labour Law“, foreign workers in the private sector are eligible for end of service benefits under the following conditions:
- A worker is entitled to a gratuity for each completed fraction of a year, provided they fulfil a continuous year of service.
- The end of service gratuity is calculated based on the final wage, specifically the basic salary. Allowances like housing, conveyance, utilities, and furniture are not included in this calculation.
- If the worker has any outstanding debts to the employer, the employer has the right to deduct that amount from the worker’s gratuity.
- All end of service entitlements must be disbursed within 14 days from the contract’s termination date.
The Voluntary Savings Scheme
In addition to these end-of-service benefits, you’ve also got the option of contributing to the “Voluntary Savings Scheme“, a unique pension scheme designed for UAE workers. This scheme offers several benefits, including:
- Financial Security: This scheme provides a safety net for your retirement years. You can contribute regularly, ensuring a stable income post-retirement.
- You’ve got the freedom to decide the contribution amount based on your comfort and financial goals.
- Your employer may also contribute to the scheme, enhancing your savings.
- Tax Benefits: The voluntary savings scheme offers attractive tax advantages.
- Your contributions are tax-deductible, reducing your taxable income.
- The growth of your investment in the scheme is also tax-free.
Full-Time Contract Benefits
Under a full-time contract, you’re entitled to various benefits as part of the UAE Labour Law. These privileges range from paid annual leave to end of service gratuity. Given the law’s complexity, it’s essential to understand your rights to avoid any potential breaches.
Here’s a brief overview presented in a table:
|You’re entitled to a minimum of 30 calendar days of paid leave after completing one year of service.
|End of Service Gratuity
|After completing one year of continuous service, you’re eligible for an end of service gratuity. This payment is based on your last basic wage and length of service.
Benefits for Other Employment Types
Let’s now shift our focus to the benefits that apply to other types of employment under the UAE Labour Law. These aren’t as straightforward as full-time contracts but still offer significant protections.
Here are the two main categories:
- Part-Time Employment:
- Part-timers are entitled to proportional end of service benefits based on their worked hours.
- They’re also protected by hour limits and overtime pay regulations.
- Temporary Employment:
- Temp workers have the right to end of service benefits if they’ve been employed for a year or more.
- They’re also eligible for a pro-rata gratuity if their contract ends prematurely.
You’re protected no matter your employment type. It’s crucial to understand your rights and benefits within the UAE Labour Law.
UAE labour law termination benefits?
UAE Termination Benefits: Key Points
- End of service gratuity: 21 days’ salary/year (1st 5 years), 30 days thereafter, max 2 years.
- Unpaid wages & benefits: Owed by employer upon termination.
- Compensation instead of notice: If an employer terminates without notice (usually 30 days).
- Repatriation costs: Employer pays for foreign nationals upon termination.
- Resignation: No gratuity, but entitled to earned wages & benefits.
- Payment deadline: 14 days after termination.
- Complaints: File with Ministry of Human Resources & Emiratisation.
- Seek legal advice: For complex situations or further clarification.
visa cancellation and final settlement letter sample
In the United Arab Emirates (UAE), when a full-time employee decides to leave their job, two parties are responsible for cancelling their visa:
- The employee’s sponsor: This could be the company they work for or their sponsor (e.g., a family member).
- The company’s HR manager: They play a crucial role in facilitating the visa cancellation process.
To streamline this process, HR managers can create a standardized template or format that employees can use to submit their visa cancellation requests. This template should clearly outline the necessary information and documents the employee needs to provide.
can I claim my pending salary after visa cancellation?
Whether you can reclaim your unpaid wages after visa cancellation hinges on several key factors. Did your employer unfairly cancel your visa, like through wrongful termination? This strengthens your case. What does your employment contract say about salaries after visa cancellation? Some contracts address this specifically. Lastly, local labour laws play a crucial role. While some countries guarantee full payment even after visa cancellation, others offer only partial amounts or nothing at all.
How to Claim your Salary after cancellation?
- Try resolving it directly with your employer first. Explain your claim and request payment.
- Gather evidence like contracts, pay stubs, and relevant communication.
- Consider seeking legal advice from a labour law specialist to understand your rights and options.
- As a last resort, you can file a complaint with labour authorities.
Is Your Company delaying final settlement UAE?
By “Article 53 of the UAE Labour Law” ” Employers must settle their final salary and entitlements, including gratuity, within 14 days of employment termination. This covers wages, accrued leave, unused vacation days, and any outstanding amounts.
The Initiate Action:
- Open Communication: Discuss the delay with your employer directly. Request a clear explanation and a committed settlement date. Maintain written documentation (emails, messages).
- Document Gathering: Collect relevant employment documents, including the contract, salary slips, leave records, and communications regarding the delay.
Seek Assistance From MOHRE:
- Ministry of Human Resources and Emiratisation (MOHRE): If direct communication fails, “file a complaint” with MOHRE online, via their app, or at a service centre. They will investigate and mediate.
- Legal Counsel: If MOHRE’s intervention falls short, consult with a UAE labour law specialist for advice and potential representation in court.
In conclusion, you should understand the final settlement of the UAE labour law. Whether you’re a private sector worker, on a full-time contract, or in other employment, there are benefits for you. Don’t overlook the Voluntary Savings Scheme. It’s crucial to be aware of your rights and entitlements. Knowing these can help you to negotiate better and ensure you’re receiving a fair deal.
What is the labour law for final settlement in UAE?
Labor Law: UAE Labour Law (Federal Law No. 6 of 2022) governs final settlements. If a worker has served for less than 1 year, they are not entitled to any gratuity pay. For those who have served for more than 1 year but less than 5 years, they are eligible for full gratuity pay based on 21 days’ salary for each year of work.
Workers with a service period of more than 5 years are entitled to a full gratuity of 30 days’ salary for each year of work, applicable after the initial five years of service.
How do you calculate final settlement?
The main component is gratuity (21 days’ salary/year, capped at 2 years). Add unpaid wages, accrued benefits, and potential notice period compensation.
how many days i can stay in UAE after employment visa cancellation?
The standard grace period you have in the UAE after your employment visa gets cancelled is 30 days. This means you have 30 days to finalize your affairs and leave the country.
What is the new gratuity law in UAE 2024?
New Gratuity Law: No separate “gratuity law” in 2024. UAE Labour Law (2022) defines calculations.
What is the settlement process in UAE?
Settlement Process: Employers must pay dues within 14 days. Employees can complain to the Ministry of Human Resources and Emiratisation (MOHRE) if needed.
What happens when your visa is cancelled uae?
When your visa is cancelled in the UAE, the situation unfolds in specific ways based on your circumstances:
- Loss of Residency Rights: You are no longer authorized to reside in the UAE.
- Invalidated Emirates ID: Your Emirates ID card becomes invalid, limiting access to official services and transactions.
- Grace Period: Usually, there’s a grace period (currently 30 days) allowing you to depart the country without incurring fines for overstaying.