The UAE Ministry of Human Resources and Emiratisation (MoHRE) has announced that employers who fail to make the required monthly contributions to the Voluntary Savings System will face disciplinary actions. These measures aim to ensure timely compliance and protect the rights of workers.

 

Four-Stage Penalty System for Employers

The ministry has outlined a four-step process for companies that fail to meet their payment obligations under the Voluntary Savings System:

 

• Initial Warning: Employers will receive an electronic warning within 30 days of a missed payment deadline. They must then make the payment within five business days.

 

• Second Notice: If the payment is not made within 15 days of the warning, the fund manager will notify MoHRE.

 

• Suspension of Work Permits: If the payment remains outstanding for two months, the issuance of new work permits will be suspended until the arrears are settled.

 

• Administrative Fines: Employers who fail to pay for four months will face a fine of Dh1,000 per enrolled employee.

 

Employer Obligations for Voluntary Savings System

Employers are required to register their employees in the Voluntary Savings System and select the appropriate category. They must also ensure the full contribution is paid to the investment fund every month, within 15 days from the start of each calendar month.

 

Additionally, employers must not deduct any portion of the contribution from employees' salaries.

 

Option for Withdrawal from the System

Employers who have been enrolled in the Voluntary Savings System for at least one year can opt to withdraw, provided they meet specific conditions:

 

• No outstanding fines or labour disputes

• A credit report confirming financial solvency to cover end-of-service benefits

• The withdrawal must not affect employees’ rights or entitlements

It’s important to note that employers will not be refunded any of the contributions already paid. However, employees will be able to either withdraw their savings upon employment termination or keep their funds invested without further contributions.

 

Conclusion

These new regulations underscore the UAE’s commitment to ensuring employers fulfill their obligations towards employees' savings and benefits. Failure to comply will result in significant penalties, including the suspension of work permits and administrative fines. Employers are encouraged to adhere to these rules to avoid disruptions and ensure the well-being of their workforce.

 

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