New UAE Labor Law and Overtime
Overtime can be defined as hours worked additionally to the normal working hours. It can be an essential part of employee payroll in some companies. Private sector employees are required to work 8 hours per day or 48 hours per week. During the holy month of Ramadan, working hours are reduced by 2 hours.
A new Labor Law – Federal Decree-Law No. 33 of 2021 on the regulation of Labour Relations which came into effect from February 2, 2022, has a detailed regulation on how overtime pay would be calculated in Article 19.
Here is all you need to know about what the law says on overtime calculation.
- The employer may ask the employee to work overtime, provided the number of extra hours does not exceed two hours in one day.
- If the work circumstances require that the worker be employed for hours exceeding the ordinary working hours, such extended time shall be deemed as overtime; for which the employer shall be paid his basic salary for his normal hours of work plus a supplement of at least 25 percent of that pay.
- If the work circumstances require that the worker be employed for extra working hours between 10 pm to 4 am, such extended time shall be deemed as overtime; for which the employer shall be paid his basic salary for his normal hours of work plus a supplement of at least 50 percent of that pay, this means 1.5 times of the normal salary. This law will not be applicable for the employees who work on a Shift basis or roster basis.
- If the work circumstances require the employee to work on his off-day, as specified in the labour contract, then the worker will be entitled to a substitute rest day, or to pay equal to normal working hours’ remuneration (which is based on basic salary) plus 50 percent of that pay which means 1.5 times of the actual pay.
HR Chronicle is the leading Cloud HR and Payroll Management Solution of the Middle East Region. HR Chronicle has the option to automate the Overtime process; you can define the Overtime formula in the Formula Section as per your company policy or as per the GCC law; which will be then get reflected in your payroll. HR Chronicle can also integrate with your Biometric Device and can calculate the overtime based on the biometric records. You can speak to our team implement HR Chronicle on +971 4 338 3775 or also visit us on our website:
Reference Link: https://u.ae/en/information-and-services/jobs/payment-of-wages
