An official from the Ministry of Human Resources and Emiratization (MOHRE) emphasized the possible advantages of the voluntary savings program, which was launched in late 2023, implying that it might help businesses recruit top staff.
The Acting Director of the Policy and Studies Department of MOHRE, Asma Al Madani, proposed this program as a way to increase workplace happiness and loyalty while also raising productivity. Further, she dropped hints that this program may supplant more conventional end-of-service rewards in the future.
Al Madani emphasized that the employer's medium-term costs under the savings scheme are lower compared to the current end-of-service gratuity system. This could enable companies to shift their focus from managing and disbursing end-of-service benefits to other operational aspects, fostering growth and capital development.
Speaking at a session on the future of work during the 2024 World Governments Summit (WGS), Dr. Abdulrahman Al Awar, Minister of Human Resources and Emiratization, stressed the importance of governments devising strategic approaches to adapt to the evolving labor market, especially in light of technological advancements.
The voluntary savings scheme, launched in November 2023, is available to employees across various sectors, including the public and private sectors, as well as free zone entities. Employers have the option to enroll their workforce in the program, providing benefits such as financial planning and a sense of ownership to employees. Emiratis are also eligible to participate in this voluntary initiative.
Under the scheme, employer contributions are determined based on labor regulations, with percentages calculated relative to the employee's length of service. This contribution, deducted from the employee's monthly salary, is earmarked for savings and cannot be withheld from wages.
Al Madani further emphasized the UAE's commitment to providing comprehensive social protection to employees, citing legislative measures enacted since 2021 to create a robust framework for labor rights. She noted the widespread coverage of medical insurance among employees and highlighted initiatives such as the wage protection system and unemployment insurance, underscoring the UAE's dedication to safeguarding workers' rights and well-being. Additionally, she mentioned the success of MOHRE's integrated system in resolving legal disputes efficiently, contributing to a fair and transparent labor environment in the UAE.