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According to a government official, the UAE plans to “enhance and improve” the end-of-service benefits awarded to employees. These changes aim to help companies attract and retain international talent.
The Director General of the Federal Authority for Government Human Resources, Abdulrahman Al Awar, revealed that the government has been carrying out studies to help improve the gratuity system. The changes could include a combination of an enhanced gratuity system and private sector employee savings schemes. This would help increase employee benefits and wider the economy.
Abdulrahman Al Awar spoke about the possible changes during the Workers Incentives and End of Service Benefits Conference in Dubai, saying, “The UAE has always protected the rights of the employees. There is obviously a great opportunity for those using [private sector] saving schemes to enhance the local economy, while also enhancing the benefits the employee will earn for their end of service in the UAE.”
“There is an urgent need in the region to establish investment funds to manage retirement and end-of-service benefits. This will then provide a saving opportunity to all employees in the UAE and the regional labour markets.These funds will help employees plan properly by taking advantage of end-of-service benefits, enabling them to make use of their financial resources and creating jobs for new generations,” Al Awar continued.
End-of-service gratuity is a major concern for the millions of expats who work in the UAE, as most of them depend on it as a retirement fund rather than a leaving bonus. No specific details or timeline has been specified yet, but the government is said to be exploring multiple policies.