UAE Labour Law: Can your boss deduct your salary for being late?
Legal experts explain wage penalties, how company policies affect pay, and your rights
Dubai: Are you finding yourself consistently late to work? Whether it is due to lack of sleep, long commutes, or family obligations, being a few minutes late might seem harmless. But, what happens when those late arrivals start piling up and lead to warnings or even salary deductions?
While workplace punctuality is important, it is crucial to understand your rights as an employee in the UAE. As legal experts interviewed by Gulf News highlighted, disciplinary penalties like wage deductions are tightly regulated. Before accepting any penalties, it is essential to know your rights under the UAE Labour Law and the role of company policies.
UAE Labour Law: What does it say about salary deductions?
“The UAE Labour Law does not allow employers to impose arbitrary salary deductions for lateness unless it is done in compliance with established internal employer policies,” Dubai-based legal associate Tim Al Ghraoui from multi-national law firm KN Legal, said.
When are deductions permissible?
He pointed to Article 25 of the Labour Law, which outlines specific situations where wage deductions are permitted:
• Loan repayments: When employees have taken loans from their employers.
• Overpayment recovery: To recover funds mistakenly paid to employees.
• Damage compensation: If employees cause damage to company property.
Specific to violations (that can include tardiness if specified by the employer), Articles 25 and 39 of the law allow employers to impose disciplinary penalties, including wage deductions, but only when these penalties are part of a company’s disciplinary procedures approved by the Ministry of Human Resources and Emiratisation (MOHRE), according to Al Ghraoui.
UAE Labour Law does not allow employers to impose arbitrary salary deductions for lateness unless it is done in compliance with established internal employer policies (as per Article 34 of the Implementing Regulations). Article 25 of the Labour Law sets out the permitted cases for wage deductions, such as repayment of loans, recovery of overpayments, or for damage caused by the employee.
Restrictions on salary deductions
“These deductions are restricted and must not exceed five per cent of the monthly wage. Importantly, any deduction should follow the proper disciplinary procedure, including informing the employee of the violation in writing and offering them the opportunity to defend themselves,” Al Ghraoui added.
“Generally speaking, we believe wage deductions for something as minor as tardiness may not be lawful, unless the circumstances merit a deduction, like excessive or repetitive tardiness, especially when it causes material harm to the employer’s business,” he affirmed.
Generally speaking, we believe wage deductions for something as minor as tardiness may not be lawful, unless the circumstances merit a deduction, like excessive or repetitive tardiness, especially when it causes material harm to the employer’s business
Human Resources (HR) and company policies on tardiness and punctuality
Al Ghraoui further explained that while the UAE Labour Law does not explicitly address tardiness, it allows companies to impose disciplinary measures, including wage deductions, as long as these policies align with the law and are approved by MOHRE. Any penalties for lateness must be clearly outlined in the company’s disciplinary regulations and implemented fairly.
Similarly, Thenji Moyo, partner and head of employment law at law firm Gateley UK, stressed that a company’s lateness policy must be clearly communicated to employees. She highlighted that HR handbooks and internal policies are not contractual documents unless expressly stated otherwise and must be crafted within bounds of the UAE Labour Law.
“HR handbooks act as official guidance by setting out the company rules and procedures that employees need to abide by. In cases where an employee does not follow the rules in the HR handbook, employers have the authority to take disciplinary action against them in accordance with their disciplinary policy, irrespective of whether the handbook is contractual or not,” she said.
In practice, HR Handbooks are not contractual documents unless expressly stated otherwise. However, HR Handbooks act as official guidance by setting out the company rules and procedures that employees need to abide by. In cases where an employee does not follow the rules in the HR handbook, employers have the authority to take disciplinary action against them in accordance with their disciplinary policy, irrespective of whether the handbook is contractual or not.
This is why it is crucial for employees to familiarise themselves with their company’s rules to avoid potential sanctions. “These penalties can range from written warnings to suspension for up to 14 days, denial of promotion for two years, or even termination," Moyo said.
She clarified though, that any penalty imposed should be proportionate to the offence. Employers must consider various factors listed under Article 24 of the implementing regulations of the UAE Labour Law when imposing a penalty, such as:
• What financial impact did the employee’s violation have on the company?
• Has the employee committed the violation in the past?
• Are there any moral considerations that must be considered?
“The employer must also notify the employee in writing of what penalty is being imposed, why it is being imposed, and any further penalties they will face if they repeat the violation,” she added.
The employer must also notify the employee in writing of what penalty is being imposed, why it is being imposed, and any further penalties they will face if they repeat the violation.
What if wage deductions violate the UAE Labour Law?
Both legal experts highlighted that employees have the right to challenge any penalties they believe to be unlawful. They can do so by filing an internal grievance, which their employers need to then investigate and notify the employee of the outcome.
“Article 24 of law requires that companies with more than 50 employees provide a grievance mechanism for employees, through which they can contest any disciplinary action or wage deduction. If an internal grievance does not resolve the matter, the employee can escalate the complaint through the appropriate legal channels, such as the MOHRE,” Al-Ghraoui.
Wage deductions are highly regulated in the UAE and cannot be imposed arbitrarily without adherence to strict legal guidelines.
“Wages are an employee’s livelihood, and other disciplinary sanctions should be applied in the first instance, with deductions only made as a last resort or in very serious circumstances,” he highlighted.
Beyond disciplinary penalties: A human-centered approach
While chronic lateness can negatively affect business productivity, imposing harsh penalties like wage deductions may foster a toxic work environment. Instead, companies should explore more ethical and considerate solutions.
Lucy d’Abo, CEO of together, a workplace culture consultancy, offered a different perspective.
“The first thing to consider is whether this behaviour is unique to a particular individual or is it perhaps a wider trend across the company. Attitudes toward punctuality can be influenced by cultural, familial, or generational factors. However, people often adapt to the organisational cultural norms when in the workplace,” she said.
Having clear policies on timekeeping is essential, but these policies are ineffective if leaders and employees do not follow them. She also suggested there may be deeper reasons behind an employee’s lateness.
“If your company has clear expectations of the importance of showing up within a certain time frame, and a particular employee frequently falls short, this could indicate an underlying issue. I would take this as an invitation to get curious and consider other factors that could be having an impact. Before rushing to judgements, explain to the employee that you have noticed that they tend to arrive later than the other team members, and ask if there is anything that is impacting their ability to make it on time,” she said.
If your company has clear expectations of the importance of showing up within a certain time frame, and a particular employee frequently falls short, this could indicate an underlying issue. I would take this as an invitation to get curious and consider other factors that could be having an impact. Before rushing to judgements, explain to the employee that you have noticed that they tend to arrive later than the other team members, and ask if there is anything that is impacting their ability to make it on time
The root cause
d’Abo explained that recurring lateness could be a sign of underlying problems like poor mental health, often exacerbated by work-related stress.
“Poor mental health can sometimes be aggravated by the workplace itself. Perhaps they have been consistently working late, are sleeping poorly due to stress, and struggling to keep up with the pace. In some instances, voluntary lateness can be an indicator of low engagement, which opens up an opportunity to discuss what are the factors that are creating that,” she revealed.
She recommended that employers, before taking disciplinary action, engage in a compassionate conversation with the employee. “Understanding the reasons is key to identifying how to improve the situation.”
Poor mental health can sometimes be aggravated by the workplace itself. Perhaps they have been consistently working late, are sleeping poorly due to stress, and struggling to keep up with the pace. In some instances, voluntary lateness can be an indicator of low engagement, which opens up an opportunity to discuss what are the factors that are creating that. Understanding the reasons is key to identifying how to improve the situation.
How to foster better punctuality at work
To create a high-trust environment, focus on these three things, according d’Abo:
• Clear communication: Ensure that your timekeeping policy is well-communicated so expectations are clear.
• Meaningful work: Keep employees connected to your company's purpose to foster motivation and engagement.
• Leadership by example: Ensure your leadership team is setting a positive example by following the company's values and expected behaviours.
By effectively achieving these, you are likely to have created a high trust culture.