By Sam Bridge
Dubai International Financial Centre says new regime commences on February 1, from which employers will make mandatory monthly contributions to savings plan
Sheikh Mohammed bin Rashid Al Maktoum, in his capacity as the Ruler of Dubai, has enacted the Employment Law Amendment Law, Dubai International Financial Centre (DIFC) announced on Tuesday.
The Amendment Law introduces the new Qualifying Scheme workplace savings scheme in the DIFC, replacing the current end-of-service gratuity payment regime that has been in place since the inception of the DIFC in 2004.
The new regime commences on February 1, from which employers will make mandatory monthly contributions to a professionally managed and regulated savings plan.
The plan replaces the existing accruing of end-of-service gratuity benefits in favour of employees, which is currently in line with the rest of the UAE.
The board of directors of the DIFC Authority has also issued new employment regulations that set out the requirements for Qualifying Schemes.
Employers will have until March 31 to enrol into a Qualifying Scheme. These include the DIFC Employee Workplace Savings, DEWS, Plan, established by the DIFC as a default scheme after an exhaustive competitive bidding process.
Alternatively, employers may seek a certificate of compliance from the DIFC Authority for an alternative Qualifying Scheme under the regulations.
Other key changes include sllowing employees to make voluntary workplace savings contributions into a Qualifying Scheme on top of the mandatory monthly contributions to be made by employers and ensuring that any accrued end-of-service benefits under the current regime remain in place.
Exemptions for certain types of employees will be created, such as those on secondment in the DIFC, short-term workers, equity partners, and employees working for government departments and bodies that have a presence in the DIFC while the mandatory contributions to be made by employers has been set at 5.83 percent of monthly basic wage (for employees who have less than five years’ service), and 8.33 percent of monthly basic wage for employees who have longer service.
Essa Kazim, governor of DIFC, said: "As we gear up for embarking upon expansion that will define the future of finance, amending DIFC Employment Law further demonstrates our position as a forward-thinking international financial hub aligned with global best practice that consistently maintains the best interests of DIFC’s dynamic workforce."For all the latest banking and finance news from the UAE and Gulf countries, follow us on Twitter and Linkedin, like us on Facebook and subscribe to our YouTube page, which is updated daily.