New UAE Labour Law: Flexible salary options that you can use

Dubai: As the new Labour Law comes into effect in the UAE on February 2, 2022, the private sector will see major changes coming into effect, from three-year work contract to flexible work models.

Another provision in Federal Decree-Law No. 33 of 2021 on the Regulations of Labour Relations (the new UAE Labour Law) includes flexible salary options that employees and employers can choose from, which are highlighted in Articles 22, 23 and 24 of the law.

While Article 22 highlights the need to clearly state the amount or type of wage that will be given to an employee in the labour contract itself, Clause 3 of the article states that as an employee, your salary could be paid in UAE dirhams or in any other currency, depending on the agreement that you reach with your company.

Article 23 goes on to state how piecemeal wages need to be calculated for workers receiving their salary through such a payment structure.

Article 24 provides the option for companies and employees to switch from a monthly payment structure to any other salary plan, which the two parties can agree upon – weekly, daily, hourly or piecemeal.

Here is a detailed look at what the law says about the various wage payment systems that are available:

Article (22) - Determination of amount or type of wage and the payment thereof

1. Amount or type of wage shall be determined in the employment contract. If such amount or type is not determined in the employment contract, the competent court shall determine the same as a labour dispute.

2. The employer shall pay his workers their wages in due time according to the Ministry's approved systems and as per the conditions, controls and procedures set by the Executive Regulations of this Decree-Law.

3. Wages shall be paid in UAE Dirhams. The wage may be paid in another currency if the parties so agree in the Employment Contract.

Article (23) - Method of calculation of wage for piecemeal paid workers

The daily wage of piecemeal paid workers shall be calculated on the basis of the average wage received by the worker for the actual days worked within six months preceding the request or action in relation to any matter relating to the Wage.

Article (24) - Transfer of worker from monthly paid category to another

A worker may be transferred from a monthly paid category to a daily, weekly, hourly or piecemeal paid category, if the worker so agrees in writing, and without prejudice to the rights which have accrued to the worker during the period of time he was paid on monthly basis.