Who gets overtime pay in UAE and how much?

Is your boss asking you to work longer hours nearly each day without any additional compensation? It may be difficult to put your foot down and turn down extra work hours but you need to know what exactly are your rights at the workplace and then take an informed decision about how to handle the matter.

First and foremost, you need to know if you are entitled to overtime pay. According to Mena employment briefing by law firm Clyde & CO, “the nature of many jobs often requires an employee to work overtime. 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,” say Rebecca Ford and Antonio Michaelides, the authors of the piece published in the employment briefing.

The employee should be aware of the normal work hours and how many extra hours can s/he may be asked to put it. “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.”

Now comes the money bit for the extra work you have done. Law experts at Clyde & Co state that 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 per cent 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 per cent of his total remuneration for the overtime period worked.

This is what should happen on a working day but how will overtime be calculated if the work is expected to be done on a Friday or a 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 per cent 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 per cent of normal daily remuneration (basic salary plus allowances) + one day's leave in lieu plus 50 per cent of remuneration; or Option B: 100 per cent of normal daily remuneration (basic salary plus allowances) + 150 per cent of basic salary,”state the authors.

Elaborating on the exclusions, the employment briefing adds: “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.”

Now, who are the ones not entitled to this kind of payment? “The UAE Labour Law exempts the following individuals from receiving an overtime entitlement,” reads the Clyde & Co briefing.  “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 per cent of remuneration or 150 per cent 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,” it states.

The law on DIFC is a different when it comes to exemptions.

“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,” elaborated the briefing.

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