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22 February 2024

Employers’ knowledge of registration, monthly contributions rules exempts them from penalties: GPSSA

By Wam

The General Pension and Social Security Authority, GPSSA, has asserted that the employers’ knowledge of registration rules and bearing the monthly shares in contributions on behalf of the insured exempts them from penalties and additional amounts imposed on them due to violation of any registration rule or settlement of such contribution.

The GPSSA explained that the share in contributions due on behalf of the insured amounts to 20 percent, of which the governmental sector employer’s share is 5 percent, while the insured will bear 15 percent. The government’s share is 15 percent of the insured’s total share in contributions, amounting to 2.5 percent, so as to support the private sector’s national workers and encourage employers to hire citizens. Such a share in contributions is settled in accordance with the calculation of the governmental sector’s basic salary, cost of living allowance, citizens’ social allowance, offspring’s social allowance, and housing allowance, with the total not exceeding AED300,000, and in accordance with the private sector’s contractual amounts and stipulations amounting to no more than AED50,000.

The authority further stated that the government and private sectors’ employers should register their employees, subject to the Law on Pension and Social Security, with the authority within a month of joining their job. The employer should also provide the General Pension and Social Security Authority with the names of their employees whose services have ended within a month as of their end of service date.

GPSSA also stated that the attention given by the authority to register the insured and avoiding having them incur any additional amount, exempt the employer from being subject to the penalties provided for in Article 60, which stipulates imposing a fine, on private sector employers, of no more than AED5,000 for each employee whose pension contribution was not settled in favour of the General Pension and Social Security Authority. The same fine will be imposed on every employer imposing an additional share on its employees for the settlement of pension contributions, given that such shares are not stipulated by the law. The court can ask the violating employer to repay its employees the amount they have incurred out of the pension contributions.

In January every year, the private sector employer is expected to submit before the GPSSA, statements of its employees’ salaries during the relevant month as well as their monthly pension contributions. They are also expected to notify the authority, monthly, of any changes in terms of the number of its employees or their salaries, with such information matching those listed under the employers’ books of accounts and records kept in accordance with the Labour Law.