Wages include the following as per law:
“All payments made to the worker on a yearly, monthly, weekly, daily, piece work, or production, or commission basis in return for the work he performs under the contract of employment, whether such payments are made in cash or in kind. Remuneration shall include the cost of living allowance. It shall also include any grant given to the worker as a reward for his honesty or efficiency if such amount are provided for in the contract for employment or in the regulations of the establishment or have been granted by custom or common practice to such an extent that the workers of the establishment regard them as a part of their remuneration and not as donations.” (http://www.gulftalent.com/repository/ext/UAE_Labour_Law.pdf)
Total Wage and Basic Wage
UAE Labour Law distinguishes between the “total” and the “basic” wage of an employee. The basic wage is an employee’s wage excluding all allowances of whatever nature and is specified in the labour contract. On the other hand total wage is an employee’s whole remuneration package inclusive of all allowances for travel, accommodation, medical insurance and any other beneﬁt the employer has stipulated. Basic wage is significant for calculation of end of service gratuity, which is determined on the basis of an employee’s last basic wage received and not the total wage. Allowances can be up to 40 percent of a total wage in some cases, so the precise structure of a remuneration package is important for employers while calculating termination costs.
Employment Benefits and Pay Package
In Dubai a basic employment package should consist of several items as prescribed by law. The employer must guarantee a return flight back to homeland of employee when employment ceases. The basic salary must be mentioned clearly in the employment contract and any gratuity pay must also be discussed. The package generally should include annual paid leave of 21 days for the first year of service and thereafter 30 days. Medical Insurance can be provided after the completion of probationary period supplied either by the government or some companies employ private coverage.
Gratuity or end-of-service benefit is the equivalent of severance pay in other countries. It is an end-of service benefit given to employees who successfully complete their contracts. As there are no provisions for pension contributions for expatriate employees in the UAE, gratuity pay is mandatory. It serves as further encouragement to employees to stay with their employers until the expiration of their contracts.
Salary Negotiation in Dubai
In Dubai salaries depend on ones qualifications and negotiation skills and thus vary widely. Salary packages are mostly dependent on how well one negotiates. Some of the items that can be negotiated are as follows:
- Allowances for food and transportation.
- Allowances for accommodation.
- Allowances for furnishing the accommodation.
- Allowances for vehicle and cell phones.
- Assistance with relocation costs.
- Reimbursement of annual return ticket.
Salary Range in Dubai
Generally, in Dubai the minimum salary for supervisory positions ranges in between Dh.5000 to Dh.7000. Only a single expatriate with an average lifestyle can be satisfied with this. But a minimum salary of Dh.10,000 to Dh.15,000 is essential for an individual planning to relocate in Dubai along with his family. Situations where accommodations are provided can be lesser than this.
Minimum Wages in Dubai
There is no prescribed minimum wage in Dubai but among the other newly introduced changes, the UAE’s ministry of labour recently announced the introduction of minimum wages for its professional workforce.
According to new labour laws, employees under skilled class level 1 (those with a Bachelor's degree) should earn a minimum Dh12,000 a month. Diploma holders, who come under skilled class level II, should earn not less than Dh7,000 and workers who have passed high school should be paid a minimum salary of Dh5,000.
Wages Protection System (WPS)
A new electronic transfer system termed as Wages Protection System (WPS) has been developed by the Central Bank of the UAE. Institutions can pay wages to their workers via banks, bureaux de change, and financial institutions which have the approval and authorization to use WPS.
The Ministry of Labour by using WPS will be able to create a database to record payment of wages in the private sector. This in turn will act as a monitoring system to keep a check on the regular and full payment of wages as decided in the contract. All institutions that are registered with the Labour Ministry will fall within the jurisdiction of WPS. (http://rbsbank.ae/UAE/lp/doc/wps_guidelines.pdf)