UAE Gratuity Legal Updates

The current UAE private-sector gratuity framework continues to operate under Federal Decree-Law No. 33 of 2021 and its implementing resolutions. The standard calculation remains: 21 days' basic wage per year for the first 5 years, and 30 days' basic wage per year for service beyond 5 years, subject to the applicable statutory maximum. Workers and employers should consult MOHRE for guidance on their specific circumstances.

The UAE Cabinet approved a voluntary End-of-Service Savings Scheme as an alternative to traditional end-of-service gratuity for eligible private-sector workers. Under this scheme, employers contribute to investment funds on behalf of enrolled employees. This scheme is separate from and operates independently of the standard gratuity framework. Employees enrolled in the scheme have their end-of-service benefits handled through the scheme rather than the traditional calculation.

The new UAE Labour Law (Federal Decree-Law No. 33 of 2021) came into force, replacing Federal Law No. 8 of 1980. The new law introduced significant changes including the elimination of the limited/unlimited contract distinction for private-sector workers under the standard framework, new work models, and updated end-of-service benefit rules. The standard gratuity calculation framework (21 days for the first 5 years, 30 days thereafter) remains as the general benchmark under Article 51.