MoHRE to suspend work permits for companies for failing to pay for ‘voluntary savings’
Four disciplinary actions will be gradually enforced against violating companies
Abu Dhabi: The Ministry of Human Resources and Emiratisation has warned companies of legal action if they fail to pay monthly contributions for employees enrolled in the Voluntary Savings System.
To ensure compliance, the ministry announced that four disciplinary actions will be gradually enforced against companies that neglect these payments.
As outlined on the ministry’s official website, employers who fail to pay the required contributions will first receive an electronic warning within 30 days of the missed payment deadline. This warning will require payment to be made within five business days of receipt. If the payment is not made within 15 days of the warning, the fund manager will notify the Ministry of Human Resources and Emiratisation.
The ministry further clarified that if payment is still not made after two months, the issuance of new work permits will be suspended until all outstanding contributions are paid or further administrative actions are taken, in accordance with existing regulations. In cases of four months of non-payment, an administrative fine of Dh1,000 per enrolled employee will be imposed on the employer.
The Ministry also clarified that when registering employees in the Voluntary Savings System, employers must select a category of employees and register their details with the investment fund through an administrative service provider. Employers are obligated to pay the full contribution amount without deducting any portion from the employees’ salaries.
Employers are required to transfer monthly contributions to the investment fund within 15 days from the first day of each calendar month.
Option to withdraw
In addition, employers may opt to withdraw from the Voluntary Savings System after one year of enrolment, subject to MoHRE approval and meeting four specific conditions:
1-The subscription must have lasted for at least one year, unless exceptional circumstances apply, as determined by the Minister of Human Resources and Emiratisation.
2-No outstanding fines or unresolved labour disputes should exist.
3-Employers must provide a credit report demonstrating financial solvency to cover end-of-service benefits.
5-The withdrawal should not affect employees’ rights or entitlements.
No refunds
If the withdrawal request is approved, the employer will not be refunded any of the basic contributions already paid. However, employees will be able to withdraw their savings upon termination of employment or keep their savings invested without further contributions. For the period after the employer’s withdrawal, end-of-service benefits will be calculated in accordance with the applicable decree-law and its executive regulations.
