An overwhelming majority of private sector employees in the UAE haven’t received a bonus in the recent past and don’t expect to this year, a poll has found.
The poll saw about 900 respondents say they received a bonus in the last 12 months, while over 600 expected to get one this year. In contrast, more than 5,300 respondents said they did not receive the sum and don’t believe they will in 2024.
A bonus is a sum of money added to employees’ salaries either as reward for good performance or if the company registers good profits in a fiscal year. It’s paid over and above an employee’s monthly salary and other benefits, typically once a year. Emirates Group on Monday awarded its employees 20 weeks of their salaries as bonus as the company announced record-breaking profits.
Experts say bonuses are not mandatory under UAE labor law, but it is common for companies to distribute them annually. The law does not provide for financial benefits, so this is determined by contractual arrangements and company policies.
“Normally, an employee’s right to receive a bonus is at the discretion of the employer unless the employment contract specifically specifies the entitlement and its terms, including criteria and calculations,” Dubai says Asma Siddiqui, a senior associate at law firm BSA. he told Khaleej Times. “Bonus provisions are therefore typically set out in employment contracts or company policies, where applicable.”
Human resources consultancy Robert Half, in its 2024 UAE Pay Guide, says that 10 employees We found that 3 people (30%) said they paid a bonus. He said that 12 months ago, no one in the company had received a bonus. The company advised business leaders to be on the lookout for disgruntled employees “as many expect annual increases.”
Adding a Payment to an Employment Contract
A bonus can be added to an employment contract as an additional payment above and beyond the monthly salary/wage to the employee.
Employment contracts establishing such rights should generally specify criteria for employee eligibility, such as B. achievement of performance goals and company profitability; therefore, bonuses. Care must be taken in determining the amount and method of calculation of his billing/payment frequency and all terms,” Siddiqui said.However, it is important that the conditions are fair, comply with labor laws, and are determined by mutual agreement.”
Calculating Bonuses
Bonuses are usually allocated after the end of the financial year. Payments vary depending on various factors.
“This includes the company’s overall performance, year-on-year growth, meeting budget targets, and evaluating the performance of individual employees,” said Candi Phillip, chief financial officer at recruitment agency TASC. ” he said. “Across industries, annual bonuses are typically between 15 and 45 days of salary, although the specific amount may vary depending on the type of industry a company operates in.”
Recruitment agency Cooper Fitch says: In the UAE Salary Guide 2024, almost three-quarters (71%) of companies surveyed revealed that they intend to pay the following salaries: Issue an annual bonus. The majority (35%) said they would pay one month’s base salary as a bonus, and 4% said they would give up four months’ salary.
“Salary continues to play a key role in talent retention, but factors beyond fixed compensation, such as annual bonuses and the ability to work remotely, are playing an increasingly important role in the UAE labor market ” says Managing Director Jacques Habas Partner – CEO and public sector advisor to the firm, the guide states.