Human Resources Ministry Outlines Legal Grounds and Permissible Deductions
Pavitra Shetty
Published on January 8, 2025, 19:39:11
The Ministry of Human Resources and Emiratisation (MoHRE) has clarified the legal grounds for salary deductions in the UAE private sector. Employers may deduct wages only under specific conditions, with varying percentages based on the nature of the deduction.
The UAE labour law and its executive regulations safeguard employees' rights to receive their agreed-upon salaries on time, provided job duties are fulfilled. Below are the cases where deductions are permissible:
Loan Repayments
Deductions for employee loans are allowed within the legal monthly limit, provided the employee gives written consent and the loan is interest-free.
Recovery of Overpayments
If an employee has received excess payments, the employer may recover up to 20% of the worker’s monthly wage.
Pension and Retirement Contributions
Contributions to retirement and pension plans or social insurance, as per national legislation, are deductible.
Savings Fund Contributions
Deductions for employee savings funds or loans within these funds are allowed with MoHRE approval.
Social Projects and Benefits
Employers may deduct instalments for social projects, benefits, or services with the employee’s written consent
Disciplinary Fines
Employers can deduct fines for employee violations per approved disciplinary regulations, up to 5% of the monthly wage.
Court-Enforced Debts
Court-mandated debts can result in deductions of up to 25% of wages, except for alimony payments, which may exceed this limit. Multiple debts are prioritized for distribution.
Compensation for Damages
Employers may deduct up to five days’ wages per month for damages caused by employee errors or violations unless a competent court approves a higher amount.
Regardless of the reasons, total deductions cannot exceed 50% of an employee’s monthly wage.
As per Ministerial Resolution No. 598 of 2022, all employers registered with MoHRE must pay salaries via the Wage Protection System (WPS) by the due date. Salaries are due by the first day of the following month after the contract-specified payment period ends. Employers are considered late if wages are unpaid 15 days after the due date.
The UAE labor law does not set a minimum wage but requires salaries to cover basic employee needs.
Salaries must be transferred through banks, exchange companies, or financial service providers in UAE dirhams or any agreed-upon currency.
Certain categories of employees are exempt from WPS requirements, including:
Employees with wage-related complaints referred to the judiciary.
Employees under an absconding report.
Newly hired employees within their first 30 days.
Employees on unpaid leave (with evidence).
Workers on fishing boats or public taxis owned by UAE nationals.
Employees of banks, financial institutions, and places of worship.
Employees can report unpaid wages or salary-related concerns to MoHRE or file a complaint through the “My Salary” service. The ministry reiterates that compliance with the labor law is mandatory to avoid legal consequences.
For any enquiries or information, contact info@thelawreporters.com or call us on +971 52 644 3004. Follow The Law Reporters on WhatsApp Channels
We use cookies and similar technologies that are necessary to operate the website. Additional cookies are used to perform analysis of website usage. By continuing to use our website, you consent to our use of cookies. For more information, please read our Cookies Policy.
Closing this modal default settings will be saved.