When the employer pays the basic subscription amounts, the Ministry of Human Resources and Emiratization has mandated that they not deduct the subscription amount from the wage of the employee who is registered in the "savings system," an optional alternative system for end-of-service rewards.
According to the Ministry of Human Resources, employees cannot enrol in the savings system on their own; rather, it is the responsibility of the employer to choose a certain number or category of workers and to register their details with the investment fund via an intermediary providing administrative services.
The amount that the company pays into the system each month—the basic subscription fee—is determined by the worker's base wage and years of experience, according to HR.
Employers are not required to participate in the system unless their employees are registered with them, according to the Ministry.
There are a number of groups that can voluntarily and optionally participate in the system. These include natural persons investing in the system, such as self-employed people or those with a self-employment permit, non-citizens working for government agencies or institutions or their affiliated businesses, and citizens working for both the public and private sectors. Provided that the business or organisation in question maintains its promise to contribute to the national pension and social insurance systems in compliance with the laws of the land.
The calculation of the basic subscription amount in the "savings system" is explained by the Ministry of Human Resources and Emiratisation. It is based on the employee's basic salary and years of experience, and it starts from the date of the employee's service start and contractual relationship with their employer, not from the date of system registration. Contribution rates for full-time employees are 5.83 percent of basic pay per month for those with less than five years of service and 8.33 percent for those with more than five years of service.
The percentage of the monthly basic wage that employees in other work patterns are required to contribute is determined according to the calculations outlined in the Decree Law and its executive rules, as mentioned in Paragraph (A).
Rather than starting from the date of registration, employers are liable for determining the amount of the monthly subscription based on the employee's continuous service period, which begins on the date of service and the beginning of the contractual connection with their employer.
Within fifteen days after the beginning of each calendar month, the employer is required by the Ministry to pay and transfer the basic monthly subscription amounts to the investment fund account.
According to the Ministry, it is illegal for employers to take money out of their employees'savings accounts before their employment ends, even if the relationship ends within the first year. However, there is an exception: if the employment ends within the first year, the employer can get their money back.
The Ministry has officially announced the "savings system," an alternative to the end-of-service reward system that workers can choose to participate in. Its stated goals include safeguarding workers' end-of-service benefits from inflation or employer default or bankruptcy, giving them opportunities to save and grow those benefits, and eventually earning returns on those savings through an investment system, making the labour market more attractive and flexible so workers can receive better services, and taking advantage of investment opportunities to boost the economy.