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Employers urged to pay gratuity of Emirati employees within one month of employment ending

Employers urged to pay gratuity of Emirati employees within one month of employment ending
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The General Pension and Social Security Authority (GPSSA) called on employers across government and private sectors to provide full end-of-service details and files of their Emirati employees, who are insured members of the authority, within a month from the employment ending.

The UAE’s pension authority said that during this timeframe it settles and expedites the insured individuals’ rights and benefits, based on Article 12 of Federal Law No. 7 of 1999 for Pensions and Social Security and its amendments.

"There are three scenarios for the end-of-service files: an insured who is not entitled to an end-of-service gratuity because they have been employed for less than one year; a file whose owner deserves an end-of-service gratuity for spending more than one year and up to 19 years and 11 months working in an entity, and the third scenario is a file whose owner is entitled to a pension as they have worked for more than 19 years, 11 months and an additional day,"

Hind Al Suwaidi, Head of the Benefits Management Department at the GPSSA, said.

"In the last scenario, the additional day is considered a full month as stipulated in the law, entitling the individual to receive a pension for a period of 20 years of service."

"We encourage insured individuals to complete a year in service at the least in order to obtain a gratuity,"

Al Suwaidi added.

GPSSA’s data for the month of May 2022 shows that the number of employees whose service ended was 361 employees, including 79 employees who worked for less than one year.

"It is important to note that although an insured individual who has worked for less than a year is not entitled to a gratuity, they are fully covered by GPSSA’s social insurance protection scheme. This means that if the insured was exposed to a work-related injury that results in a disability or a disease, he/she will still receive a retirement pension. In the event of his/her death, the end-of-service gratuity goes to his/her family in line with the rules and provisions,"

Al Suwaidi went on to say.

The insured can receive both a pension and an end-of-service gratuity only when they have spent a contribution period with the GPSSA for over 35 years. In this case, he/she is entitled to a gratuity of three months from the pension calculation salary upon completing every year.

"The disbursement of insurance benefits, whether it is a retirement pension or end-of-service gratuity, depends on two basic elements: the contribution salary and the insured period of service covered by the provisions of the law (actual period, including the previous service period and the nominal service period). The contribution salary and the pension value increase as your serve more years," GPSSA’s official affirmed.

The law stipulates that insured individuals are entitled to receiving end-of-service gratuity unless he/she has been terminated from their job due to a disciplinary decision, and even then, not more than a quarter of the gratuity is deducted.

"It is not permissible to deduct or seize an end-of-service gratuity except in fulfillment of an adjudged alimony or to restore an amount wrongfully paid to the insured. In all cases, the deductions made should not exceed a quarter of the gratuity. If multiple deductions have to be made, the alimony is prioritized for the wife, children or parents,"

Al Suwaidi said.

"According to the law, a pensioner or an insured individual whose Emirati nationality is forfeited or withdrawn from him/her, becomes deprived of the pension or end-of-service gratuity. Upon his/her death, the amount is fully distributed amongst the heirs or beneficiaries if they are UAE nationals

"If, however, the UAE nationality is withdrawn from them, or if they do not originally have it, half of their shares are paid and distributed amongst them, in accordance to the provisions of the law."

If an insured is entitled to an end-of-service gratuity, it is calculated based on the average contribution salary as well. The gratuity is calculated at the rate of a month and a half average calculation salary for each year of service from one to five years, and an average calculation salary of two months for each year of service from five to ten years, and a three-month average calculation salary for each year of service exceeding ten years.

News Source: Emirates News Agency

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