Companies must make the leave salary calculation in UAE based on the working time of the employee. This bonus is only for employees with more than 6 months of work in the company. Furthermore, certain conditions apply to the said calculation, according to the UAE Labour Law.
In this article, you will know more about the annual leave permit and how to do the necessary calculation of this payment. In the same way, we will detail some aspects that will require your attention at the time of the computation process. Let us see:
- How to carry out the leave salary calculation in UAE?
- What other aspects should you consider for a leave salary calculation in the UAE?
- What other permits can a worker get in the UAE?
- How can we help you with the leave salary calculation in the UAE?
1. How to carry out the leave salary calculation in UAE?
Annual leaves in the UAE refer to the time granted by companies to workers, who also receive a payment. Employees can take advantage of this leave for any personal purpose, such as vacations, family visits, and more.
Federal Law No. 33 of 2021 regulates this license, effective as of February 2, 2022. Moreover, this law also determines other licenses for workers in the United Arab Emirates such as:
- Sick leave.
- Maternity and paternity.
- Disability leave.
- Leave for humanitarian reasons.
- Study leave.
- Compensatory license.
- Hajj License.
1.1 Rules for annual leave salary calculation in UAE
The annual leave calculation in the United Arab Emirates, according to the Labour Law, consists of the following:
- An employee who has worked for a year or more in the company must receive 30 days of paid vacation.
- If the employee has worked for 6 months or more, they must receive 2 days of vacation for each month of work. For example, if the employee worked in the company for 8 months, they should receive 16 days of paid vacation.
- If the employee works part-time, there must be a clause in the contract that specifies this leave. In these cases, the UAE Labour Law does not establish an exact number of days for paid annual leave. However, the employer must calculate this allowance based on the working day determined by the Execution Regulations of the Labour Law.
Likewise, the employer must pay the full salary before the employee takes their annual vacation time. This appears in Article 80 of the UAE Labour Law which states:
- “The employer will pay the worker, before their annual vacation, the total salary that corresponds to them, in addition to the vacation pay determined under the provisions of this law.”
On the other hand, if the employer requires the worker to work during this leave, the same article establishes the following:
- “The employer must pay the worker the salary of the same, in addition to a license allowance for the days of work, equal to their base salary.”
2. What other aspects should you consider for a leave salary calculation in UAE?
The annual leave in UAE Labor Law is now well-defined, but there are aspects that you should also consider. In this way, you can clear any doubts regarding this leave payment. The most frequent aspects and concerns regarding this type of license are:
2.1 Who determines the start and duration of the annual leave?
The employer is the one who has the power to decide when to grant the UAE annual leave to the worker. In addition, you may reserve the right to divide the entirety of this permission into two parts as you deem necessary. Also, under the law, an employer may delay part or all vacations of the employees.
However, if the company does not transfer the vacation to the following year, it must compensate the employee for it. The worker’s salary plus a vacation allowance for the days they worked will make up this payment.
However, this vacation may only be postponed by the employer once every two years. The employee must also be paid if they do not receive their leave salary, and you must calculate their leave salary correctly in the UAE. An employee cannot be made to work two years straight on vacation by their employer.
2.2 What happens if an employee falls ill during their annual leave?
In this case, the employee must inform the company where they work in the next two days after getting sick. In this way, the employer will take the necessary measures to carry out a medical examination for the worker and verify the nature of the illness.
2.3 Holidays during the annual leave in UAE
For the calculation of vacation pay in the UAE, public holidays count as part of such leave. Article 77 establishes that if the vacations by law or agreement occur during these vacations, they count as part of them.
2.4 Annual leave calculation if an employee is terminated or resigns
An employee of a company must receive annual vacation pay in these cases:
- The employment is terminated.
- The employee stopped working for the company.
You will receive this benefit after completing the notice period determined by the Labour Law. In both cases, the worker must receive the rest of the salary corresponding to the vacation if they have not received it. In addition, the base for leave salary calculation in the UAE is the one that the employee receives at the time of expiration of the permit.
2.5 Can the employer fire the worker during their holiday?
Article 90 for annual leave in the UAE Labor Law states that you cannot fire an employee in these cases. It specifically determines that you cannot fire employees or give them advance notice during their vacation period. If a company dismisses a worker while they are on leave, the employee can take legal action.
2.6 Should the company provide a plane ticket for the worker’s vacations?
The Labor Law of the United Arab Emirates does not cover this aspect, so the answer is no. Therefore, this matter is left to the discretion of the company, especially for those who worked for more than a year. However, when the employment contract ends, things change according to the law.
2.7 What happens if the worker does not report at the end of their annual leave in UAE?
If the worker does not show up after their UAE annual leave, they will not receive a payment for the days of absence. Article 89 establishes that these days of absence begin on the day following the termination of the leave.
2.8 Can a person work during their annual leave?
No, an employee cannot work elsewhere during this period. Furthermore, Section 88 dictates that if the worker does that, the employer can terminate the contract. In addition, this may be done without prior notice and may deprive the employee of the salary corresponding to the time of the leave.
2.9 Housing and allowances during annual leaves in UAE
When it comes to the leave salary calculation in the UAE, the housing allowance enjoyed by the worker is included. In addition, according to Article 78, the worker has the right to receive the allowances that they usually receive during this period.
3. What other permits can a worker get in UAE?
Apart from annual leave, there are other types of leave that the human resources department must take into account. All these licenses can be:
3.1 Sick leave
The law limits sick leave to a total of 90 days for each year of work the worker has performed. In addition, this leave can be taken by the employee at one time or distributed throughout the year. However, an employee on a probationary period cannot enjoy this leave until three months after the said period.
The calculation is like this:
- For the first 15 days, full payment.
- In the following 30 days, the payment is reduced by half.
- For the last 45 days, you should not make the payment.
In this and other cases, you must convert the salary of the worker to a daily salary, that is, divide it by 30. After this, multiply this amount by the number of days of leave to obtain the corresponding compensation.
3.2 Maternity leave
According to current laws, specifically Federal Law No. 33 of 2021, maternity leave goes from 45 days to 60 days. The payment will consist of:
- For the first 45 days, the payment is complete.
- For the following 15 days, the payment is half the salary.
In the same way, employees will be entitled to this leave even if the baby dies. Likewise, mothers who suffer from pregnancy-related illnesses will enjoy 45 days of unpaid leave. Also, if the baby was born with a disability, the mother will have:
- 30 additional days of paid leave
- 30 days of unpaid leave
These days are in addition to normal maternity leave.
3.3 Parental leave
This type of license applies to both the mother and the father of the newborn. In this case, the two will enjoy 5 days of paid leave in the 6 months following the birth. In addition, parental leave for the mother must be added to maternity leave.
3.4 Leave for humanitarian reasons
This leave is granted to employees who have suffered the death of a spouse or close family member. This license consists of the following:
- For the death of a spouse, the leave is 5 paid days.
- In the event of the death of a parent, child, brother, grandchild, or grandparent, the leave is three days of paid leave.
3.5 Study leave
This leave is only for those employees with more than two years of service, who can request a 10-day leave. However, the law does not specify whether this leave is paid or not. Therefore, in this particular case, the company has the last word regarding the conditions of this license.
3.6 Compensatory time
Employees who work during public holidays must receive compensation by the company. This compensation consists of a bonus equivalent to 50% of salary plus a day off. However, if the company does not grant the day off, the compensation will be 150% of the daily salary.
3.7 Hajj license
Like the UAE annual leave, the Hajj license consists of 30 days but the employee does not enjoy a salary. The difference is also that this leave is only once during the entire working period of the employee.
4. How can we help you with the leave salary calculation in UAE?
The leave salary calculation in UAE must be accurate to properly compensate your employees and prevent legal trouble. In this way, you will avoid inconveniences and your workforce will be happy with their job, promoting employee satisfaction.
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It is time for you to know more about annual leave in the UAE Labor Law. We offer you the best consulting services in the UAE. Are you ready to hire top talent without worrying about paying their wages or managing their benefits? Contact us by calling us at +971 433 16 688. You can also send us your inquiries through an email to firstname.lastname@example.org.