Abu Dhabi, UAETuesday 19 November 2019

'Should I pay in dirhams or the local currency for overseas credit card spends?'

The Ras Al Khaimah resident wants to know the most cost-effective option for travellers

The reader plans to use credit cards to pay hotel bills during the trip. Associated Press
The reader plans to use credit cards to pay hotel bills during the trip. Associated Press

I am travelling abroad shortly and will be using my credit card to pay hotel bills. I always get asked if I want to pay in home or local currency but I never know which to choose. Which is the best option? FN, Ras Al Khaimah

Most people are probably aware that credit card providers charge a foreign transaction fee but this is not the only cost you could end up paying. If UAE Dirhams is selected when given an option, the cardholder will be hit with what is known as ‘dynamic currency conversion’. This is a process whereby the amount of the transaction is converted to the currency of the country of issue at the point of sale and it allows the merchant or bank to charge an additional amount. People will often request payment in the currency of the credit card but this is not the best option as the exchange rate will be poor and will increase the real cost of the amount spent. Therefore it is invariably best to select the local currency.

I will leave my employer in a few weeks and am working my notice period. I will take up a new job but not until the end of September. Does an employer have to continue providing medical insurance for staff after they leave? My boss says it will be cancelled when they cancel my visa. ED, Dubai

For employees on a Dubai visa, their employer must provide medical insurance in accordance with Dubai Health Authority (DHA) rules. The DHA issues regular guidance and employers should keep up to date with any changes, as should insurance companies and brokers. In November 2017, DHA issued General Circular Number 5 of 2017 (GC 05/2017) and this states: “As stated in ‘General Circular 09 of 2016’ pertaining to individual refunds, we had stated that individually sponsored domestic helpers must be covered for 30 days after the cancellation of the policy. Going forward the same requirement will apply to all members insured under group policies. Therefore, for a group policy with a January 1 2017 inception date, and a December 31 2017 expiry date, if a deletion request was sent on June 1 2017, the member would be covered until July 1 2017. However if a deletion request was received on December 15 2017 the member would only be covered until expiry of the policy. The cover required post deletion date must at minimum cover emergency expenses. It is encouraged, however, to maintain the existing benefits, terms and conditions.”

Therefore an employer must provide cover for up to 30 days after visa cancellation unless the individual is insured under a new scheme. This can be for emergencies only but it is rarely feasible for a company to arrange new terms for one individual for such a short period, so the practical solution is to continue with cover in the main scheme.

My employer has decided to make weekends count as holiday days so if I took a week of holiday from Tuesday to Tuesday, then Friday and Saturday would also be included amounting to eight days holiday in total. Is this right? Can they do this?

Secondly can my employer demand I take two days holiday for Christmas even if I don’t want to take them and the office will be shut on these days. The festival falls on a Wednesday and Thursday this year, so they also want to take the Friday and Saturday as holiday so I will end up using four days holiday. Again, is this right? SR, Abu Dhabi

It is legal for an employer to include public holidays and weekends in the calculation of the total number of days of annual leave if they fall during the period of said leave. In this case, the employer is correct in counting the weekend although not every employer will do this; it is at the discretion of the company. This has always been common practice in the UAE. As there is variation between employers, it is wise to check company policy in each case so as to avoid disappointment. Note that if public holidays do not fall within the dates of annual leave, they are treated as fully paid days off and not part of the leave allowance.

For the second query, Article 76 of UAE Labour Law states: “The employer may determine the date of the commencement of the annual leave, and may divide it if necessary to two or more periods.” They can specify when leave is taken, such as when the office is closed, but it seems unfair to count this as four days. If the employer is not willing to change this, SR must contact the Ministry of Human Resources and Emiratisation for a dispute resolution.

Keren Bobker is an independent financial adviser and senior partner with Holborn Assets in Dubai, with over 25 years’ experience. Contact her at keren@holbornassets.com. Follow her on Twitter at @FinancialUAE

The advice provided in our columns does not constitute legal advice and is provided for information only

Updated: September 7, 2019 12:30 PM

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