UAE: New end-of-service gratuity system introduced for private sector employees,Yes, that’s correct. The United Arab Emirates (UAE) has introduced a new end-of-service gratuity system for private sector employees. The new system, announced in September 2019, replaces the previous system and aims to enhance employee rights and support the growth of the private sector.
Under the new system, gratuity calculations will be based on an employee’s last wage rather than the length of service. This means that gratuity payments will be higher for those who have served longer with the same employer.
The changes also include provisions for early service settlement, allowing employees to withdraw their gratuity after completing at least five years of service instead of waiting until the end of their employment.
These changes to the end-of-service gratuity system are part of the UAE’s ongoing efforts to improve labor regulations and enhance the rights and benefits of private sector employees.
