The nature of many jobs often requires an employee to work over time. Whether or not an employee will be entitled to overtime (as well as the applicable rate) under Federal Law No 8 of 1980 on the Regulation of Labour Relations (as amended) (UAE Labour Law) is often an intricate issue, and depends on the role of the employee, the time the overtime is completed and the working time system the company has in place.
Normal working hours
Under the UAE Labour Law, an employee's normal working day should not exceed 8 hours. An employer is also able to request an employee to perform up to 2 hours of additional work which will be treated as overtime. In return for working the additional 2 hours, the employee is entitled to overtime pay equivalent to the wage paid during ordinary working hours plus an additional amount of not less than 25% of the total remuneration (i.e. basic salary plus allowances) for the overtime period. However, if the overtime falls between the hours of 9pm and 4am, he will be entitled to overtime pay equivalent to the remuneration payable during normal working hours plus an increase of not less than 50% of his total remuneration for the overtime period worked.
Work on a Friday or Public Holiday
If circumstances require the employee to work on a Friday, he must be granted either another day off (in lieu) or receive his basic salary plus an additional 50% of his remuneration (i.e. basic salary plus allowances). However, employees cannot be asked to work more than two consecutive Fridays unless they are employed on a daily wage basis.
Where an employee works on UAE public holidays declared for the private sector, the employer can elect one of the following payment structures:
- Option A: 100% of normal daily remuneration (basic salary plus allowances) + one day's leave in lieu plus 50% of remuneration; or
- Option B: 100% of normal daily remuneration (basic salary plus allowances) + 150% of basic salary.
The UAE Labour Law states that overtime should not exceed two hours per day, unless it is necessary to prevent substantial loss, a serious accident or to eliminate its consequences.
The UAE Labour Law exempts the following individuals from receiving an overtime entitlement:
- Those in managerial or supervisory positions that confer upon the individual the power of an employer over the employees (this exception does not apply for work on a public holiday and all categories of employees are entitled to either a day off in lieu of the public holiday worked and a supplement of 50% of remuneration or 150% of basic salary if no lieu day is given).
- The crews of seagoing ships and persons employed at sea and enjoying special conditions of service due to the nature of their work, except dock workers engaged in loading and unloading and related operations.
In accordance with the applicable Ministerial Order, individuals in managerial or supervisory positions will include employees who are either the Chairman of the Board of Directors, the General Manager, the Department Managers or supervisory staff, acting with the authority of the company.
The DIFC Employment Law contains no exemptions for certain categories of employees or workers from its provisions and applies to all employees who wholly or usually work in the DIFC. It does not provide for statutory overtime rates as there are no specific provisions relating to overtime. However, the DIFC Employment Law contains a provision that permits employees to opt out of the maximum permitted working week of 48 hours (provided that they do so in writing). Where employees do opt out, the employer remains under a duty to ensure that the wording hours are not excessive such as to affect the health and safety of the employee.
If you would like to discuss any of the issues raised in this legal update please contact Rebecca Ford.