His Highness Sheikh Mohammed bin Rashid Al Maktoum, Vice President and Prime Minister of the UAE and Ruler of Dubai, in his capacity as Ruler of Dubai, approved amendments to Employment Law No. (4) for the year 2020 of the Dubai International Financial Center. The amendments to the Center’s Employment Law include replacing the end-of-service gratuity system in place since the establishment of the center in 2004 with a new retirement plan for employee savings in the workplace at the Dubai International Financial Center. The new law is scheduled to start from February 1, 2020, where employers will make mandatory monthly contributions to the systematic and managed savings plan. The new plan replaces the employees' end of service benefits system, which is currently in line with the regulations in force in the rest of the Emirates.
The DIFC Authority Board of Directors has also issued new employment regulations that outline the requirements for retirement programs, and employers must register for retirement programs within a deadline of March 31, 2020. These programs include the “Employee Savings Fund Plan in the Workplace” developed by the Dubai Financial Center Global as the best retirement program in its class after conducting a competitive competitive bidding. Employers can apply for a "compliance certificate" from the DIFC authority to develop an alternative retirement program under the regulations.
The requirements for retirement programs reflect the commitment of the DIFC to the applicable regulations, as these requirements include the presence of a supervisory body entitled to appoint and exempt the program operator, review its governance policies, fees and costs imposed on the program. Moreover, retirement programs require a representative of employers and employees, as well as an independent oversight body with the goal of ensuring adequate protection of employee interests.
Other major amendments included allowing employees to make voluntary contributions to employees ’savings funds in the workplace within the framework of the retirement program, in addition to the mandatory monthly contributions that employers must provide under the Employment Law, and ensuring that any rewards due to end of service under the current system remain, while providing owners Working with the option to pay these dues within the framework of the retirement program, as well as providing exemptions for specific segments of employees, such as employees on the Dubai International Financial Center, workers with short-term contracts, shareholders, and employees of representative offices in Dubai Air and government bodies in the Dubai International Financial Center.
The new amendments also included the settlement of mandatory contributions made by employers by 5.83% of the monthly basic salary, for employees whose number of years of service is less than five years, and by 8.33% of the monthly basic salary for employees who have longer service, and providing exemptions to international institutions Which have legal obligations to provide pension salaries, or similar contributions on behalf of its employees elsewhere, along with employers who wish to present a reward-based plan to their employees that exceeds the mandatory contributions specified under the Dubai Financial Center’s Employment Law The world, in addition to a number of other improvements.
Issa Kazim, Governor of the Dubai International Financial Center, said: "In confirmation of our commitment to provide a prosperous workplace for more than 24,000 employees in the Dubai International Financial Center, amendments to the Center's employment law will provide a clearer approach for employers and employees who wish to increase their savings safely, and in a manner that serves the interests of In doing so, the Dubai International Financial Center provides an example for other global best practices in this area.
He added: "As we prepare to enter the stage of expansion that delineates the future of the financial sector, the amendment of the Dubai International Financial Center's employment law confirms our leading position as an innovative global financial center in line with international best practices used to preserve the interests of workers in the center in an optimal way."