Social Security law in the UAE is designed to provide financial protection and welfare benefits to employees and their families. The system primarily focuses on ensuring social stability through pension schemes, unemployment benefits, and health insurance.

Social security contributions apply only for UAE and GCC nationals working within the UAE. If UAE/ GCC nationals are employed, both the employer and the employee will be required to make social security contributions to the General Pension and Social Security Authority (GPSSA).

For the employer to pay contribution, the employee should:

1. Be a UAE national
2. Not be less than 18 years; nor should he/she be more than 60 years
3. Be medically fit upon appointment according to a medical report provided by a medical authority and approved by GPSSA.

An Emirati national is entitled to a pension if he/she as an insured person reaches retirement age of 60 years and completes an insured service period of 15 years.

There are following laws in United Arab Amirates:

1. Federal Law No. 7 of the year 1999 on Pension and Social Security:

This law applies to every entity/person having one or more employees who hold nationality of UAE. If an employee is insured with GPSSA under this law, employer shall keep paying contribution under this law.

2. Federal Decree Law No. 57 of 2023 regarding Pension and Social Security:

This law applies to every entity/person having one or more employees who hold nationality of UAE. If an employee gets insured with GPSSA on or after 31^st October, 2023, employer shall be paying contribution under this law only.

 

REGISTRATION

Under both laws, every employer shall register/insure its employees (within one month of joining) with GPSSA through online.

The employer shall provide the authority with a statement of the name of an employee whose service is terminated within one month at most from the date of the termination of employment.

 

PAYMENT OF SOCIAL SECURITY CONTRIBUTION

1. Federal Law No. 7 of the year 1999 on Pension and Social Security:

Employer shall pay social security subscription on or before 15^th day of the following month to the GPSSA. Contribution shall be paid at the rate of 20% which comprises:

• Employer: 15% (of which 2.5% shall bear by government for the employer in private sector in the form of support to encourage the employee to hire citizens)
• Employee: 5%

2. Federal Decree Law No. 57 of 2023 regarding Pension and Social Security

Employer shall pay monthly contribution on or before 15^th day of the following month to the GPSSA. Contribution shall be paid at the rate of 26% which comprises:

• Employer: 15% (of which 2.5% will be paid by the Government where an employee earns less than AED 20,000)
• Employee: 11%
• Employer to pay an additional amount at 0.1% of the outstanding contributions for each day delayed without warning or notice.

For instance: For the month of January, contribution shall be paid by 15^th February and for the month of February, contribution shall be paid by 15^th March and so on as for rest of the months.

 

OTHER OBLIGATIONS OF THE EMPLOYER

1. Employer shall maintain books and records.
2. Employer to provide statements, list and documents, including the details of the salary to the GPSSA within 10 days as the request made from the authority.
3. Employer shall pay full compensation if the injury has occurred through his/her error or negligence.
4. Employers are required to make accurate contributions based on the actual salary of the employee.

PENALTIES

An employer in the private sector subject to the provisions of these laws may be sentenced to a maximum fine of Dh50,000 (fifty thousand dirhams) for non-compliance.

 

CONCLUSION

The Social Security laws in the UAE play a crucial role in safeguarding the financial stability and welfare of UAE and GCC nationals employed within the country. By establishing clear guidelines for pension schemes, unemployment benefits, and health insurance, these laws ensure that employees and their families are protected against various economic uncertainties.

Both Federal Law No. 7 of 1999 and Federal Decree Law No. 57 of 2023 outline specific requirements for employer and employee contributions, with significant updates in the recent decree aimed at enhancing the social security framework. Employers are obligated to register their employees with the General Pension and Social Security Authority (GPSSA), ensures timely payment of contributions, and complies with other regulatory requirements to avoid penalties.

Non-compliance with these regulations can result in substantial fines, underscoring the importance for employers to adhere strictly to the established rules. By understanding and fulfilling their responsibilities under these laws, employers contribute not only to their employees’ security but also to the broader goal of social stability in the UAE.

In summary, adherence to the UAE’s Social Security laws is essential for maintaining a secure and equitable work environment, benefiting both employees and employers alike.

 

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