Many people wonder what is the minimum wage in UAE. Unlike other countries, the United Arab Emirates does not have a national minimum wage stipulated in labor law. What is true is that the law mentions that salaries must cover the basic needs of employees. Thanks to the lack of a national minimum wage, there is a significant variation in salaries for different jobs in the country.
In this article, you will find detailed information about the minimum wage in UAE. While it is true that there is no national minimum wage, some employers may set their minimum wages. Of course, this is for some job positions or categories of employees. In addition, you should know that the UAE Labor Law establishes that salaries and remunerations must cover the basic needs of employees. That is why we will explore how each of the salaries is determined and the factors that influence them.
Impact of the UAE Minimum Wage on Workers and the Economy
In the UAE, the Ministry of Human Resources and Emiratization implemented a new legal framework to regulate labor relations in the private sector. The legal framework establishes the labor rights that employees have. Furthermore, this applies to both citizens and foreigners of the UAE.
Currently, there is no UAE minimum wage, but the country has very high minimum remuneration rates. Being among the highest remuneration rates in various industries. Additionally, they establish the Wage Protection System (WPS) to ensure that employees can receive their minimum wage in Dubai.
The importance of the Salary Protection System is notable since it allows salaries to be paid in full and on time. For this reason, the impact that wages have on the economy and UAE workers is very significant. Minimum wage Dubai provides workers with a basic level of protection, where they receive fair remuneration for their work.
In this way, it helps improve the living conditions of employees and promotes equality in the workplace. Furthermore, this can also have a significant impact on the economy. This happens because it stimulates the purchasing power of employees, boosting internal consumption and in turn economic growth.
Improving Living Standards: How the UAE Minimum Wage Benefits Workers
Companies provide many benefits to their employees in order to retain their best talent. Among these benefits, you can find health insurance in the UAE, maternity and paternity leave, subsidies, bonuses, etc. However, the most stimulating benefit for employees is the salary they will receive for their work.
For this reason, as mentioned above there is no Minimum salary in Dubai and it is not mandatory. Despite this, the minimum remuneration for employees is one of the highest in the world. In this way, the United Arab Emirates is one of the best places to work, not only for job opportunities but also for remuneration.
For nationals of the country, the minimum wage is set by their educational qualification. You will receive 3,000 AED per month if you have graduated from less than high school. On the other hand, if you have graduated from high school, you will receive AED 4,000 monthly. Finally, if you have your university certificate you will receive AED 5,000 per month.
Understanding the UAE’s Minimum Wage: Regulations and Updates
The UAE Employment Law does not stipulate a national minimum wage. However, you should know that salaries must cover all the basic needs of employees. Although a minimum wage is not specified, minimum remuneration rates have been implemented in different industries.
This ensures that employees can receive fair compensation. In addition, a new legal framework was introduced, which is responsible for regulating labor relations in the private sector. For this reason, in this section, we will explore in more detail the regulations and updates related to the UAE,
Even the rights and responsibilities that employees and employers have will be analyzed. In addition, the minimum remuneration rates in different industries and what are the latest legislative updates that the UAE government has announced.
Recent Developments and Updates in UAE Minimum Wage Policy
In Article 27 of the new law, you can see everything about the minimum wage. In this way, it becomes an unprecedented measure for the UAE. The amount of this minimum salary will be determined and announced by the UAE cabinet. All this at the proposal of the Ministry of Human Resources and Emiratization, in collaboration with all the relevant authorities.
Apart from the articles that prohibit discrimination based on religion, race, sex, etc., a new law arrives. Where you will see the explicit decision on all the provisions that are responsible for regulating the employment of employees without discrimination; will apply to all working women.
Here the emphasis is on granting women the same salary as men if they do the same work. In addition, it also applies if they perform work of equal value to that of a man.
Key Regulations Governing the UAE Minimum Wage
It is important that you know that some job positions may have higher salaries. While other jobs do not require experience, they may have lower salaries. The first thing you have to know is that according to the employment law, there is no minimum wage in UAE. However, basic salaries exist in the UAE.
The basic salary in this country is the amount that is paid to the employee. You can see this salary in the employment contract that must be signed before starting work. You should know that the base salary excludes benefits, expenses, per diems, and any other benefits. That is, it is the amount that the employer pays the employee for compliance with his contractual obligations.
In summary, there is no minimum wage in UAE, but there are three types of salaries, which are:
- Gross salary: Allowances + basic remuneration.
- Base Salary: This is the basic compensation found in the contract.
- Net salary: Gross salary – assumptions.
Although it is true, the employment law does not establish anything about the minimum wage in UAE. However, it does establish some guidelines on deductions and basic salary.
On the other hand, employers or business owners need to learn how to offer salaries, benefits, and contracts. Additionally, you have to know the regulations on how to process payroll, which is a tedious process.
Among the most important regulations that must be followed regarding the minimum wage in UAE, are the following:
Pay salaries right on the due date: The duty of employers is that they have to pay salaries on time. Payment delays will result in fines, which would be detrimental to your company.
WPS System: All employers must pay their employees using the Wage Protection System. Otherwise, they may incur fines and sanctions.
Minimum Wage Rate and Adjustments
It is important that you know that the employment law in the country does not stipulate a minimum wage in UAE. However, the government put into action minimum remuneration rates in different sectors. This is in order to guarantee that workers receive fair compensation.
While it is true, there is no mandatory UAE minimum wage for employees in the UAE. However, payment rates must indeed be agreed directly with the employer through collective bargaining. There are other means to establish a living wage.
It is essential to keep in mind that compensation rates can change over time. In addition, there may be periodic adjustments to reflect current economic and employment conditions.
In order to obtain updated information on minimum remuneration rates in a specific industry you have to review official sources. Specifically, contact or review the website of the Ministry of Human Resources and Emiratization of the UAE. Thus, you can be aware of the latest news about the minimum wage in UAE and other similar aspects.
Now, surely, you want to know what the minimum remuneration rates are. These are set amounts that ensure workers receive fair compensation for their work. You should know that these rates ensure that employees have an ideal remuneration that covers their basic needs.
It is essential to know that minimum remuneration rates may vary depending on the type of employment and industry. There are also other factors such as employee experience and working conditions. According to analytical sources in the country, the minimum remuneration rate in the UAE is approximately Dh600 per month. On the other hand, the maximum rate is approximately 3,000 dirhams per month. These figures are for the year 2023 and are subject to updates.
Enforcement and Compliance Measures
An employee who commits a violation may be subject to disciplinary sanctions. That is, if a worker fails to comply with the employment law, the appropriate sanction must be imposed based on the violation. They have to impose these sanctions in accordance with the rules that are in the Executive Regulations, which include:
- Degree of violation of the confidentiality of commercial data or information by the employer.
- Effect of the violation on the safety and health of other workers.
- The financial impact of the violation or contempt.
- Effect of the violation on the reputation of the business owner and other employees.
- An abuse by an employee who has an executive position with conferred power.
- Repetition of any violation by the employee or worker.
- Moral and criminal aspects of rape.
All employers must establish a sanctions policy. Which must follow certain disciplinary sanctions provided for in Article 39 of the New Labor Law.
It is important to highlight that the sanctions that are in this article may affect an employee. Although there is an exception and that is if the violation is reported in writing beforehand. In addition, you have to listen to the statements and present your defense and a record of the offender’s personal file. This sanction must be indicated at the end of said record.
On the other hand, workers must have written information about the sanctions imposed on them. It is important to highlight that reasons, amounts, and penalties imposed if recidivism occurs must be included.
A worker cannot have an accusation of a disciplinary infraction detected more than 1 month previously. A disciplinary sanction cannot be imposed more than 2 months after the end of the investigation into the violation and its finding against the worker.
Enforcement and Penalties for Violations
The new labor law in the UAE came into force on February 2, 2022, and governs labor relations in the private sector. This law aims to protect the rights of employers and employees in the employment relationship. In addition, to guarantee an equitable and fair work environment.
Enforcement measures and penalties for labor law violations may vary depending on some factors. For instance, the severity and nature of the infraction. Some of the enforcement measures and penalties for labor law violations may include:
Fines: All employers can impose fines on employees as a penalty for violations of labor law in the UAE.
Warnings: Employers may issue written warnings to workers who have violated the provisions of labor law.
Suspension: All employers may suspend workers without pay for a specified period as a disciplinary measure.
Termination of contract: In severe cases of labor law violations, business owners can terminate employees’ employment contracts.
Other sanctions: In addition to all the measures mentioned above, the competent authorities may impose other disciplinary sanctions. For instance, the revocation of business licenses or the prohibition of hiring foreign workers.
All employers need to be aware that enforcement actions and penalties for labor law violations may vary.
Payroll – WPS