Question 1

Who is eligible for gratuity in the UAE?

Accepted Answer

Gratuity pay in the UAE is granted exclusively to expatriate employees. UAE nationals are covered under the National Pension Scheme and are therefore not eligible for gratuity.

Question 2

When does an employee become eligible for gratuity?

Accepted Answer

An employee becomes eligible for gratuity upon completing at least one year of continuous service with the employer. Gratuity is payable upon resignation or termination, provided this minimum period is met.

Question 3

Is there a cap on the amount of gratuity payable?

Accepted Answer

Yes. The total gratuity amount cannot exceed the equivalent of two years' basic salary. This does not include allowances such as housing, transport, or utilities.

Question 4

How is gratuity calculated in the UAE?

Accepted Answer

Gratuity is calculated based on the employee's last drawn basic salary and years of service:For the first five years: 21 days of basic salary per yearFor service beyond five years: 30 days of basic salary per year

Question 5

Under what circumstances can an employer withhold gratuity payment?

Accepted Answer

An employer may legally withhold gratuity if:The employee was dismissed for gross misconductThe employee has not completed one full year of serviceThe employee fails to present a valid employment contract or work permitThe employee caused deliberate damage or loss to the company

Question 6

Is there a penalty for not paying End of Service Benefits (EOSB) in the UAE?

Accepted Answer

Yes. Employers are legally required to pay EOSB in accordance with UAE Labour Law. Failure to comply may result in legal action, fines, and reputational damage. Employees have the right to file a complaint with the Ministry of Human Resources and Emiratisation (MOHRE) to claim their entitlements.

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