Dubai International Financial Centre (DIFC) has amendment employment laws to introduce the new Qualifying Scheme workplace savings plan in the financial hub, replacing the current end-of-service gratuity payment regime that has been in place since 2004.
The new regime comes to effect on 1 February 2020, from which employers will make mandatory monthly contributions to a professionally managed and regulated savings plan.
Essa Kazim, the governor of DIFC, said: "With a firm commitment to creating a prosperous hub for our 24,000 professionals based at the DIFC, these comprehensive enhancements to DIFC Employment Law will give clear guidance to employers and employees seeking to grow their savings securely while fortifying both their interests."
These comprehensive enhancements to DIFC Employment Law will give clear guidance to employers and employees seeking to grow their savings securely"
DIFC Authority's board of Directors also issued new employment regulations that set out the requirements for Qualifying Schemes.
Employers will have until March 31 to enrol into a Qualifying Scheme. These include the DIFC Employee Workplace Savings, DEWS, Plan, established by the DIFC as a default scheme after an exhaustive competitive bidding process.
Alternatively, employers may seek a certificate of compliance from the DIFC Authority for an alternative Qualifying Scheme under the regulations.
The requirements for Qualifying Schemes include having an oversight body that will have the right to appoint and remove the scheme operator, review its governance and fees and charges imposed on the scheme.
Exemptions for certain types of employees will be created, such as those on secondment in the DIFC, short-term workers, equity partners, and employees working for government departments and bodies that have a presence in the DIFC while the mandatory contributions to be made by employers has been set at 5.83% of monthly basic wage (for employees who have less than five years' service), and 8.33% of monthly basic wage for employees who have longer service.
Other key changes include allowing employees to make voluntary workplace savings contributions into a Qualifying Scheme on top of the mandatory monthly contributions to be made by employers and ensuring that any accrued end-of-service benefits under the current regime remain in place.