x Abu Dhabi, UAEWednesday 26 July 2017

Does UAE Ministry of Labour require correct salary for end of service gratuity calculation?

Keren Bobker helps an Abu Dhabi-based employee who is concerned that the company has not updated its records to reflect salary increases.

I have been with my current employer for nearly five years and in that time I have received a few pay increases. I am aware that the contract registered with the Ministry of Labour does not show my correct salary and I am concerned that this will affect my end-of-service gratuity as I plan to leave soon after I have been here for five years. Does the company not have to update the records by law? WS, Abu Dhabi

Strictly speaking, a contract should be updated with the Ministry of Labour to reflect any changes, but this should not affect any payments for calculations. The date of starting employment is unchanged and your gratuity is based on your last salary and the number of years worked. If, for any reason, the contract lodged with the ministry is not updated and your employer does not calculate the gratuity correctly, you will have your salary payments to your bank account as a record of the correct sum, and these can be used to demonstrate what the proper payment should be if necessary.

Keren Bobker is an independent financial adviser with Holborn Assets in Dubai. Contact her at keren@holbornassets.com. Follow her on Twitter at @FinancialUAE

Editor’s note: The advice provided in our columns does not constitute legal advice and is provided for your information only. Readers are encouraged to seek appropriate independent legal advice.