Leave salary – Basis of Calculation
Every employee under UAE Labour law is entitled to Annual Leave. Read here about Annual Leave. Many companies and employers, in violation of UAE Labour Law, pay only Basic salary or no salary at all during annual leave. UAE Labour Law clearly states about Leave Salary.
The employee shall receive his basic pay in addition to housing allowance, if any for the annual leave days. However if the exigencies of work necessitate that the employee works during his annual leave in whole or in part, and the period of leave during which he has worked, has not been carried forward to the next year, the employer ought to pay him his wage in addition to cash in lieu of leave for his working days based on his basic pay.
Note: Basic salary and Housing allowance are to be paid during annual leave. If employee is made to work during the annual leave, he should be paid cash(on basis of basic salary) in lieu in addition to the leave salary.
The employee is entitled to receive cash in lieu of annual leave days not availed by him, if he was dismissed or if he left the service, after the
period of notice stipulated by law. Cash in lieu of leave is calculated on the bases of pay received by the employee at the time of maturity of such
Note: An employee is eligible for cash in lieu of leave not utilised.
Remuneration due to an employee plus that of the approved leave under this law shall be paid in full by the employer to the employee before the
latter’s departure on annual leave.
Note: Leave salary should be paid prior to proceeding on annual leave.
If exigencies of work necessitate that the employee work on holidays or rest days against which he receives full or partial pay he shall be
compensated in lieu thereof with increase in pay by 50% of his wage, but if he has not been compensated for the same with a leave, the employer shall
pay him an increase to his basic wage equivalent to 150% of the days of work.
Note: If the employee has to work during holidays, he must be compensated as above.
I hope this clarifies many things. As an employee, you must be aware of your rights under UAE Labour Law. For this reason, I urge you to download copy of UAE Labour Law and read it.
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