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Salary Payment Options in the UAE and Legal Remedies When Employer Fails to Pay

Insights into payment alternatives and legal recourse for workers facing salary delays or non-payment

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Rakeshh Kumar SV

Published on June 22, 2024, 11:37:50

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salary payment options

In the United Arab Emirates (UAE), where the workforce spans various industries and nationalities, ensuring fair and transparent payment practices is crucial.

The UAE Labour Law provides a framework that outlines not only the rights of employees but also the obligations of employers when it comes to salary payments.

Understanding the nuances of these regulations is essential for both employers and employees to foster a harmonious working environment.

Here are six salary payment options stipulated by the UAE Labour Law, shedding light on how wages can be paid while maintaining fairness and compliance:

1 Monthly Salary Payments: The most common practice in the UAE is the monthly salary payment, where employees receive their wages on a monthly basis. This ensures regular income for employees and allows employers to streamline their payroll processes.
2 Daily Payments: This kind of wage is paid for temporary or seasonal jobs, where the company pays the worker on a day’s work basis.
3 Weekly Payments: In certain industries or for specific job roles, weekly salary payments may be preferred. This option offers employees more immediate access to their earnings and can be beneficial for those with financial commitments requiring regular cash flow.
4 Hourly Payments: An hourly wage is the amount an employee is paid per hour they work. An employer pays an employee based on how many hours they work each pay period, which might be a week, two weeks, half a month or a month.
5 Quarterly Payments: For employees on higher salaries or in specialised roles, quarterly payments may be agreed upon. While less common, this option provides a lump sum every three months and can be advantageous for those with substantial financial responsibilities.

Annual Payments: In rare cases, particularly for senior executives or individuals with unique employment agreements, annual salary payments may be negotiated.

Although less frequent, this option allows for comprehensive financial planning and may include bonuses or other incentives tied to yearly performance.

Regardless of the chosen payment frequency, the UAE employment law mandates that employers adhere to certain guidelines to ensure fair and timely wage disbursement.

These include providing detailed salary statements, adhering to minimum wage requirements, and avoiding any unlawful deductions.

Moreover, employers must offer employees the option to receive their wages through electronic transfer to their bank accounts, promoting efficiency and transparency in salary transactions.

By offering a range of salary payment options, the UAE employment law prioritises flexibility and fairness, ensuring that the rights of both employers and employees are protected.

This commitment to a balanced working relationship fosters trust and stability in the UAE's diverse workforce, contributing to its continued economic growth and prosperity.

If an employee is not paid their salary on time, they have legal remedies available to seek redress and ensure that their rights are upheld. Here are some potential legal remedies that an employee can pursue:

Informal Resolution: Initially, the employee may opt for informal resolution by directly discussing the issue with their employer or the HR department. This approach may lead to a quick resolution without the need for formal legal action.
Formal Complaint with the Ministry of Human Resources and Emiratisation (MoHRE): If informal resolution attempts fail, the employee can file a formal complaint with MoHRE. The ministry has established channels for handling labour disputes, including non-payment of wages. MoHRE may intervene, investigate the matter and facilitate a resolution between the employer and employee.
Employment Tribunal: If the issue remains unresolved, the employee can escalate the matter to the employment tribunal. The employment tribunal specialises in resolving disputes related to employment contracts and labour rights. Employees can file a lawsuit against their employer for non-payment of wages, and the tribunal will adjudicate the case based on UAE employment laws and regulations.
Legal Representation: Employees have the right to seek legal representation to navigate the complexities of labour disputes and tribunal proceedings. A qualified labour lawyer can provide guidance, represent the employee's interests in legal proceedings, and advocate for their rights under UAE employment laws.

Compensation and Remedies

If the employment tribunal rules in favour of the employee, they may be entitled to various remedies, including:

Back Pay: Compensation for the unpaid wages owed to the employee.
Penalties: Employers may be required to pay penalties or fines for violating labour laws, including delayed salary payments.
Termination of Contract: In severe cases, the tribunal may order the termination of the employment contract and award compensation to the employee for any damages incurred.

It's important for employees to document any instances of non-payment or delayed payment of wages, including keeping records of salary statements, communications with the employer and any other relevant evidence.

This documentation can strengthen their case when seeking legal remedies through MoHRE or the employment tribunal.

Overall, UAE employment laws provide robust protections for employees facing issues such as non-payment of wages, ensuring that they have legal avenues to seek redress and uphold their rights in the workplace

For any enquiries or information, contact ask@tlr.ae or call us on +971 52 644 3004Follow The Law Reporters on WhatsApp Channels.

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