In today’s fast-paced work environment, overtime has become a common practice for employees, no matter what industry you are in. However, there are certain laws in place around the concept of overtime to protect the rights of employees in the UAE, while also ensuring fair compensation for the additional hours they put into work.
Let’s dig into the key aspects of employees working overtime, the UAE laws governing it, and useful insights to help employers as well as employees to make informed decisions.
Defining overtime
Overtime refers to the additional hours that an employee works for, beyond their regular working hours. Depending on what has been agreed in the employment contract, these additional hours are usually compensated at a comparatively higher pay rate to acknowledge the additional effort and time that was put into the job.
Overtime may or may not be the same as ‘extra hours’ at a certain job. To better understand the difference, ‘extra hours’ could include the additional hours for which an employee may have voluntarily worked, but without qualifying for overtime pay.
UAE regulations regarding overtime
The UAE Labour Law has certain provisions in place, for private sector employees in the UAE in order to protect their rights:
- Article 17 (1) of the Federal Decree Law No. 33 of 2021 on the Regulation of Labour Relations in the Private sector (the “New Employment Law”): The maximum working hours shall be 8 working hours a day or 48 working hours per week.
- Article 17 (2) also states that the Cabinet has the power to (after the Minister and the concerned entities agree) increase or decrease the daily working hours for certain economic sectors or certain categories or workers, in addition to the working times, breaks, and hours when work is prohibited for certain categories of workers.
Employer’s obligations
There are certain obligations that an employer has towards their employee in the UAE. Depending on the job role and the contract that was signed, factors like working conditions, provision of accommodation, sick leaves, not withholding the employee’s documentation, etc. may or may not be included.
Here are some important points to keep in mind:
- According to the law, unless the employee holds a managerial position, they are entitled to receive overtime pay for any work performed beyond the standard working hours.
- The time spent by the worker in commuting from their place of residence to the workplace ideally cannot be calculated within the working hours, except for certain categories of workers according to the controls set by the Executive Regulations of this Decree-Law. However, this is not fixed for every worker and job profile, so employees can discuss this with their employers, and they can decide on an option that is mutually convenient to them.
- Workers cannot be employed for more than two rest days in a row. Daily workers could be an exception.
- If the worker is not a full-time worker or an original employer, they cannot insist that the worker must work for him more than the agreed hours in the employment contract, unless this was agreed in advance by both of them.
- If the worker wants to perform work remotely, whether inside or outside the UAE, and with the consent of the employer, the employer may specify a certain number of working hours.
Calculating overtime compensation
1. The Employer may employ the worker for additional working hours as long as they do not exceed 2 hours a day. The total working hours should not exceed 144 across three weeks.
2. If the work circumstances require the worker to work over their usual hours, then this will be treated as overtime and the worker will be paid their basic wage (for normal hours of work), in addition to at least 25% of that wage.
3. If the work circumstances require the worker to be employed for extra hours between 10 pm and 4 am, then the worker shall be paid the basic wage (for normal hours of work), in addition to at least 50% of that wage. This shall not apply to workers by shifts.
4. If the work circumstances require the worker to be employed on their rest day as specified in the Employment Contract or as per the internal work policies, then they shall be compensated with a substitute rest day or, be paid their basic wage (for normal hours of work), in addition to at least 50% of that wage.
In case of a dispute
According to the UAE Labour Law, employees are entitled to receive 25% to 50% of their salary for their overtime work. However, it is important to note that certain exemptions and variations may apply based on factors such as the employee’s role, the nature of the work, and the time of day when the worked overtime.
If a specified employment type does not fall under any of the exempted categories determined by MoHRE, then the worker cannot claim overtime for the additional hours of work.
In case of a dispute regarding the listed UAE regulations and employer’s obligations above, you can contact the Ministry of Human Resources and Emiratisation (MoHRE) to see if your worker is eligible for overtime compensation.
Conclusion
By understanding the UAE laws and regulations on overtime, employees can protect their rights, negotiate fair compensation, and make informed decisions about working beyond their regular hours. Working overtime could be demanding, but it is also important to remind employees of the financial benefits and opportunities for skill development.
For more information related to your employees’ financial rights, WPS-compliant salary processing or payroll services in UAE, feel free to reach out to us on info.ae@edenred.com
