Free Zone, tourism and hospitality registered companies included
Abu Dhabi 1 April 2017: In a circular distributed to employers, the General Pension and Social Security Authority (“GPSSA”), called yesterday for employers’ compliance with the registration and contribution requirements for their UAE employees. GPSSA stressed that registering UAE employees with the Authority and the payment of their contributions is obligatory under the provisions of Federal Law No. 7 of 1999 concerning Pensions and Social Security, as amended. GPSSA indicated that it had reports revealing non-compliance by certain employers with the registration and contribution requirements for their UAE employees with the Authority, which may cause harm to them and their families.
GPSSA explained in its circular that, in accordance with Article 15 of the Pensions Law, non-registration of all or some of the UAE staff members, failure to pay contributions or payment of contributions based on false wages may subject private sector employers to the payment of an additional amount of 10% of the payable contributions without prior notice or warning.
GPSSA urged employers with overdue contribution payments for their insured employees to settle such amounts on timely basis as per the Law to avoid the payment of additional amounts as prescribed under Article 14 of the Law which stipulates that “The employer shall undertake to pay its share and that of the insured of the contributions payable to the Authority, and in case of overdue payments, the employer shall become liable to pay an additional amount of (0.1%) of the payable contributions for each day of delay without the need for warning or notice.”
GPSSA noted that the Law includes another penalty for breaching its provisions, as Article 60 of the Law stipulates that “Each employer in the private sector who is subject to the provisions of this Law shall be subject to a fine of Dhs. 5,000 for each employee not registered with the Authority. Each employer who charges its employees with a part of the insurance expenses, that is not provided for under this Law, shall be subject to the same fine, and the court shall, of its own accord, adjudge for compelling the violating employer to pay to such employees the value of the security expenses borne by them.”
GPSSA further explained that the purpose of the circular is to promote awareness among employers of the risks involved in case of non-registration, non-payment or delaying the payment of the contributions payable for their UAE employees, out of its concern for the interest of the employers as partners in the UAE growth journey, and at the same time to preserve the rights of the UAE employees working in various sectors. GPSSA stressed that even though the employer is the body assigned with the registration of, and payment of contributions for, the insured employees, all UAE employees working at various sectors shall make sure that they are registered with GPSSA to preserve their rights and the rights of their families, as secured by the law.
GPSSA noted that during 2016, it has conducted 95 inspection visits which uncovered several violations by employers, including non-registration of an insured, registering the insured with false employment date, failure to pay monthly contributions for an insured, payment of monthly contributions based on false wages, failure to provide GPSSA with lists of terminated employees within a maximum period of one month from their termination, and failure to provide the Authority with their end of service files via its website, which may cause harm to the insured due to GPSSA not being able to settle the insured’s entitlements and not enabling it to register the insured in its files when he joins a new employer.
© Press Release 2017
