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Working in UAE as an employee or an employer is an enough to reason to be aware of labor laws of the country regardless of your employment status. Companies incorporated within UAE, be it mainland or free zones are bound to comply with the provisions of UAE Labor Law (Federal Law number 8 of 1980) which is further regulated through Ministry of Labor. Such provisions of the Labor Law oblige the employer to pay end of service benefits to the employee post expiration of his employment contract, subject to certain terms and conditions which shall be discussed in this article.End of service benefits is an extensive topic including variety of benefits wherein gratuity holds the biggest proportion thus, can be quite intimidating, considering multiple terms and conditions attached to calculating gratuity. “How is Gratuity calculated?” as simple the question is, the answer to this can be quite comprehensive. Nevertheless, I will try to simplify the method of gratuity calculation in this article and will try to cover every aspect in different circumstances.Upon termination or expiration of your contract, you are entitled to receive your End of Service Benefits (EOSB) pursuant to the Labor Law. However, completion of the contract can be both through termination or resignation and in either case the employee is empowered to claim gratuity, however, it has further conditions which will be discussed in this article.The BasicsThe primary step in calculation of gratuity is to consider whether the employee was terminated or he resigned. Secondly, it is important to ascertain the type of the contract which can be either limited or unlimited and in both termination and resignation the calculation of gratuity varies in limited or unlimited contract.Article 132 of the Labor Law obligates the employer to pay gratuity post completion of 1 year of the contract, the law reads as follows:“The employee who has completed one (1) or more year of a continuous employment, is entitled to receive end of service remuneration post completion of his service. The day’s absence from work without pay shall not be take into consideration while computing the end of service. The remuneration for services will be calculated as below:A. Twenty one (21) day’s pay for each year for first five (5) years of the service;B. Thirty (30) day’s pay for each additional year of service.”Importantly, gratuity is to be calculated on the basic salary excluding all allowances. The foregoing provision is the basic rule for computing gratuity under the Labor Law.UNLIMITED CONTRACTTerminationA. Employment term less than one (1) yearIn accordance with Article 132 of the Labor Law, an employee is only entitled to gratuity post completion of one (1) year of service. Thus, for an employment term less than a year, you are not eligible to receive gratuity.B. Employment service more than one (1) year but less than three (3) yearsUpon completion of one year of service, the employee is entitled to receive gratuity worth 21 days of basic salary for each year of service. For instance, if the employee was employed for 24 months of continuous service, wherein his basic salary was AED 10,000 (UAE Dirhams ten thousand), the calculation of gratuity will be as follows:Basic Salary= AED 10,000Per-Day Salary= AED 333.3 Approx.Number of working Years= 2Gratuity= 333.3 X 21 X 2= AED 13,998.6C. Employment service more than three (3) but less than five (5) yearsFor unlimited contract, the gratuity amount for continuous service between three to five years would be 21 days basic wage for each year of service. For instance, if the employee was employed for 4 years of continuous service, wherein his basic salary was AED 10,000 (UAE Dirhams ten thousand), the calculation of gratuity will be as follows:Basic Salary= AED 10,000Per-Day Salary= 10,000 X12/365 = 328.7Number of working Years= Joining – End date and calculate the number of days/years worked21 days basic wage= Salary per day X 21 days = 328.7 X 21 = AED 6902.7Gratuity= 6902.7X4 (number of years) = AED 27,610.8D. Employment service of more than five (years)Employment service of more than five years under an unlimited contract will allow you to receive gratuity for 21 days of basic wage for first five year of continuous service, whereas, you will receive 30 days of basic salary for each additional year of service post five years. For instance, if the employee was employed for 7.5 years of continuous service, wherein his basic salary was AED 10,000 (UAE Dirhams ten thousand), the calculation of gratuity will be as follows:Basic Salary= AED 10,000Per-Day Salary= 10,000 X12/365 = 328.7Number of working Years= Joining–End date and calculate the number of days/years worked = 7.521 days basic wage= Salary per day X 21 days = 328.7 X 21 = AED 6902.7Gratuity= AED 6902.7 x 5 = 34,513 + 10,000 x 2.5 = 25,000 = 59513 AEDApart from the receiving gratuity, an employee is subsequently entitled to receive additional benefits which forms a part of EOSB and such benefits are as follows:· Salary for notice period (1-3 months) as what is mentioned in the employment contract, according to Article 118 of the labor law;· Salary towards unused annual leave or any certain part of it;· Additional bonus or commission earned by the employee, yet unpaid and agreed between the parties via employment contract;· Salary towards additional time or overtime worked;· Payment towards one way ticket to home country as agreed between the parties pursuant to the terms of the Employment Contract, according to Article 131 of the Labor Law;· If the termination of employment contract was unreasonable and unjustified, the employee shall receive compensation for a maximum of 3 months’ salary, pursuant to Article 122 of the labor law.ResignationA. Employment term less than one (1) yearThe employee is not entitled to receive gratuity if he has resigned from his employment under an unlimited contract before completion of one year. This is in accordance with Article 132 of the Labor Law.B. Employment term more than one (1) year but less than three (3) yearsIn reference to Article 137 of the Labor Law, the employee working under an unlimited contract resigns post completion of one year but less than three (3) years, shall be eligible to receive gratuity equal to 1/3rd of the 21 days of basic salary for each year of employment. For instance, if the employee was employed for 1.5 years of continuous service, wherein his basic salary was AED 10,000 (UAE Dirhams ten thousand), the calculation of gratuity will be as follows:Basic Salary= AED 10,000Per-Day Salary= 10,000 X12/365 = 328.7Number of working Years= Joining–End date and calculate the number of days/years worked = 1.521 days basic wage= Salary per day X 21 days = 328.7 X 21 = AED 6902.7Gratuity= AED 6902.7 x 1.5 = 10354.05 / 3 = AED 3451.35C. Employment term more than three (3) year less than five (5) yearsFor an employee who has worked for more than three years, yet less than five years and resigned under an unlimited contract, shall be entitled to 2/3rd of 21 days of basic wage for each year of service. For instance, if the employee was employed for 4 years of continuous service, wherein his basic salary was AED 10,000 (UAE Dirhams ten thousand), the calculation of gratuity will be as follows:Basic Salary= AED 10,000Per-Day Salary= 10,000 X12/365 = 328.7Number of working Years= Joining–End date and calculate the number of days/years worked = 421 days basic wage= Salary per day X 21 days = 328.7 X 21 = AED 6902.7Gratuity= AED 6902.7 x 4 = 27,610X 2/3 = AED 18,407.2D. Employment term more than five (5) yearsResignation under an unlimited contract post completion of five (5) years or more will empower the employee to receive gratuity for 21 days of basic salary for first 5 years and 30 days of basic salary for each additional year after 5 years. For instance, if the employee was employed for 7.5 years of continuous service, wherein his basic salary was AED 10,000 (UAE Dirhams ten thousand), the calculation of gratuity will be as follows:Basic Salary= AED 10,000Per-Day Salary= 10,000 X12/365 = 328.7Number of working Years= Joining–End date and calculate the number of days/years worked = 7.521 days basic wage= Salary per day X 21 days = 328.7 X 21 = AED 6902.7Gratuity= AED 6902.7 x 5 = 34,513 + 10,000 x 2.5 = 25,000 = 59513 AEDLIMITED CONTRACTThe calculation of gratuity for limited contract varies from the gratuity calculation for unlimited contract and it further varies in cases where the employer terminates the limited contract or if the contract is finished due to resignation.TerminationA. Employment service less than one (1) yearRegardless of the type of your contract, if you have been terminated before one (1) year of completion of service, you are not entitled to receive gratuity. Although, it is possible to receive other EOSB depending upon the circumstances under which the contract was terminated.B. Employment service for more than one (1) yearIn case of termination of a limited contract post completion of one (1) year of service and up to three (3) years, the employee is entitled to receive 21 days of basic salary for each year. For instance, if the employee was employed for 2 years of continuous service, wherein his basic salary was AED 10,000 (UAE Dirhams ten thousand), the calculation of gratuity will be as follows:Basic Salary= AED 10,000Per-Day Salary= 10,000 X12/365 = 328.7Number of working Years= Joining–End date and calculate the number of days/years worked = 2Gratuity= 328.7 X 21 X 2= AED 13,998.6ResignationThe resignation under a limited contract within 5 years of service will not allow the employee to receive or claim any gratuity. This is in accordance with Article 138 of the Labor Law, which reads as follow:“Where an employee under a limited term contract resigns from his employment at his own initiative before the expiry of his employment term, he shall not be entitled to gratuity unless his continuous period of service exceeds five years.”The only exception to this general rule is that you should exceed you limited term contract with a service for more than five years.A. Employment service for 5 yearsUpon completion of 5 years of services in limited contract, the employee is eligible to receive 21 days of basic salary for each year of service. It can be simply calculated and you can refer to the afore-mentioned calculation method highlighted in above provisions.B. Employment service for more than 5 yearsAs similar to the unlimited contract, the employee who has completed more than 5 years under an unlimited contract and has resigned thereafter, he shall be entitled to receive 21 days of basic pay for first five years and 30 days of basic salary for each year of service thereafter. For instance, if the employee was employed for 7.5 years of continuous service, wherein his basic salary was AED 10,000 (UAE Dirhams ten thousand), the calculation of gratuity will be as follows:Basic Salary= AED 10,000Per-Day Salary= 10,000 X12/365 = 328.7Number of working Years= Joining–End date and calculate the number of days/years worked = 7.521 days basic wage= Salary per day X 21 days = 328.7 X 21 = AED 6902.7Gratuity= AED 6902.7 x 5 = 34,513 + 10,000 x 2.5 = 25,000 = 59,513 AEDAdditional Facts about GratuityI believe the afore-mentioned calculations will give you a clear idea of how gratuity shall be calculated depending upon the type of the contract and the way it has been finished. Whereas, labor law has mentioned some additional provisions in relation to gratuity which shall be taken into consideration before claiming your gratuity, which are as follows:· Maximum GratuityArticle 132 of the Labor Law restricts you to a certain amount of gratuity which can be claimed from the employer, in any given scenario which shall not exceed you 2 years of salary. The concerned provisions explicitly states that “The severance pay shall not exceed the entire total remuneration of 2 years.”· NO GratuityIn accordance with Article 139 of the Labor Law, an employee is not entitle to receive gratuity, if he has been terminated under Article 120 of the Labor Law or the employee willingly resigns under the contract without giving any notice in cases other than Article 121 of the Labor law. The concerned provision is as follows:Article 139:“An employee shall forfeit entitlement to his entire severance pay in any of the following two cases:1. If he is dismissed from service for any of the reasons specified in Article 120 hereof or if he abandons his employment in order to avoid being dismissed in accordance with that Article.2. If he abandons his employment of his own accord, otherwise than in either of the two cases specified in Article 121 hereof, without notice (in the case of indefinite term contracts) or before completing five years of continuous service (in case of definite term contracts).”In order to explicitly understand Article 139, one shall also understand Article 120 and Article 121 of the Labor Law, which are as follows:Article 120:“An employer may dismiss a worker without notice if and only if the worker:1. Assumes a false identity or nationality or submits forged certificates or documents.2. Is engaged on probation and is dismissed during or at the end of the probationary period;3. commits a fault resulting in substantial material loss to the employer, provided that the latter notifies the labour department of the incident within 48 hours of his becoming aware of its occurrence;4. disobeys instructions on the safety of work or workplace, provided that such instructions are in writing and posted at a conspicuous place and are communicated verbally to the worker, in case he is illiterate;5. defaults on his basic duties under the contract and fails to redress such default despite awritten interrogation and a warning that he will be dismissed if such default is repeated;6. is finally convicted by a competent court of a crime against honour, honesty or public morals7. reveals any confidential information of his employer;8. is found in a state of drunkenness or under the influence of a narcotic drug during working hours;9. assaults the employer, the manager in charge or any of his workmates during working hours; or10. absents himself from work without a valid reason for more than 20 non-successive days in one single year, or for more than seven successive days.”Article 121“A worker may abandon his work without notice in either of the following cases:1. If the employer fails to honour his obligations towards the worker, as provided for in the contract or in this Law.2. If he is assaulted by the employer or the employer's legal representative.”End NoteThe above article is just a guide in line with the provisions of Labor Law which can assists you at the time of calculating gratuity. Nevertheless, if your employer denies you to remit your gratuity, you have the right to initiate a complaint with Ministry of Labor followed by a case in the labor court and it is advised to reach out to Employment Lawyers in Dubai to have a better understanding of the law.

Something like this happened to me the year I opted for a FSA [flexible spending account] with my employer. It came with instructions “pay with this special credit card” (usable only for health care expenditures) and “send the insurance company the receipts.”I used the card to pay the dentist (specifically permitted) and sent the receipt to the insurance company. They wrote a stern letter saying “We need an EOB. Your account is in OVERPAYMENT STATUS!” My employer translated that for me: “Ask your dentist for an Explanation of Benefits and send it to the insurance company.” The dentist’s receptionist sent me the form and I sent it to the insurance company, certified mail, return receipt requested. The insurance company nastily undertook harassment, in letters and telephone calls to me at work, claiming “we never got the form and we’re going to get a collection agency after you and report you to the IRS.” The company also called HR at my workplace to complain about me, so HR called me in to explain. I showed them my photocopies of the receipt and the EOB, plus the return receipt from the post office. HR managed to get the insurance company off my back, but it was quite a struggle.Next year at benefit election time, I knew better than to opt for a FSA!

H-1B Start: General Legal InformationSummaryThe H-1B is a temporary United States work visa, valid for an initial period of up to three-years, and may be extended to a maximum of six, with limited exceptions. To qualify, a foreign national must be coming temporarily to the United States to perform services in a specialty occupation for a U.S. employer. A specialty occupation is generally defined as one that requires the attainment of at least a bachelor’s degree (or its equivalent, possibly based on education and/or experience) as a minimum requirement for entry into the occupation.H-1B sponsorship is tied specifically to any sponsoring employer. The client employer is called the petitioner or employer (ER), petitioning the US government; and the foreign national employee is the beneficiary of the visa petition, also known as employee (EE).Main Factors Affecting ApprovalObtaining a new H-1B is somewhat predictable based on several factors, but never assured with the federal government and the current state of affairs at the USCIS. A filing that is not approved will not receive a refund of fees from the USCIS nor the law firm. We try to make a fair assessment of our odds of approval in advance.The main factors affecting approval are:Ø The position offered. Does it require someone with at least a bachelor’s degree? For example, even if someone has a PhD, that person would not qualify for an H-1B visa based on work as a waiter.Ø The person. Does the H-1B beneficiary have a degree (or equivalent) which closely matches the company’s requirements and specific position offered? This has been an area of contention between the USCIS and practitioners of immigration law. USCIS has been requiring occupation-specific majors, while the law clearly supports granting of visas to applicants with degrees in multiple disciplines, as long as it reasonably qualifies the applicant to perform the work. For example, occupation specific degrees are required in law or medicine, but for marketing or IT positions, there are usually a number of academic disciplines which are acceptable.Ø The company. Is the company financially viable and of a sufficient size and complexity to justify hiring the H-1B candidate? Factors considered by the USCIS include the company’s stage of development, organizational complexity, ability to pay the required wage, current number of employees, gross income, and funding. Evidence provided to document company operations varies on a case-by-case basis. A comprehensive list is available in our H-1B Start Employer Questionnaire.H-1B Employer ObligationsØ Protect wages in the region. Employers must pay every H-1B worker wages that are 100% of the wages paid to US workers in similar positions in the same geographical region. This wage is referred to as the prevailing wage.Ø Protect wages in the workplace. Employers must pay every H-1B worker the actual wages paid to other employees in the same position, with normal variability for experience, merit, skills, etc. This wage is referred to as the actual wage.Ø Post the proposed salary. Employers must post the prospective salary or the salary range for an H-1B position for 10 business days at the worksite in two conspicuous locations. Advertising required, only if the company is H-1B dependent - see below.Ø Protect working conditions.Employers cannot use H-1B workers to break a strike and they must notify their U.S. workforce of the hiring of H-1B professionals.Ø Provide benefits equally. Employers must provide benefits to H-1B employees in the same manner as provided to similar U.S. workers.Ø File a Labor Condition Application (LCA). Employers must file a Labor Condition Application attesting to the wages and the no-strike use of H-1B employees with the U.S. Department of Labor (DOL).Ø Pay the employee during benching. Employers who bench employees during non-productive status must continue to pay full salary and benefits as attested on the Labor Condition Application.Ø Be subject to penalties for failures. Failure to comply with DOL regulations could result in civil penalties, a requirement to pay back wages, and even debarment from participating in key immigration programs. Audits are performed by US immigration authorities randomly.Ø No discrimination in hiring. The employer may decline employing any worker who is not legally eligible to work. Written offers should be contingent upon proof of eligibility to work for any employer in the U.S. If a candidate requests sponsorship for H-1B status, the company can decide to sponsor or not.Ø Return transportation. If an employer terminates an H1-B employee before the end of that employee’s period of authorized stay, the employer is liable for the “reasonable costs” of return transportation for the employee to his or her last country of residence. Immigration statutes and regulations suggest that the employer’s liability is limited to the reasonable cost of physically returning the H-1B employee, and does not extend to the cost of relocating family members or property.Ø Withdrawal of H-1B after termination. Regulations require an H-1B employer to notify USCIS “immediately” of “any material changes in the terms and conditions of employment” affecting an H-1B employee. USCIS policy is that a termination is such a “material change.” Employers may satisfy this notification obligation by sending a letter explaining the change or termination to USCIS office that approved the petition.H-1B Employee ObligationsØ Inform Lawyer of Travel. An employee who will be traveling in H-1B status should inform a lawyer in advance to make sure that all paperwork is in order and to ensure that H-1B status is still valid. He/she may need a trip to a US Embassy or Consulate abroad before returning to secure a visa stamp.Ø Quitting a job is allowed. An employee may quit his/her employment in H-1B status at any time. He/she may be subject to contractual terms made specifically with the employer, outside the scope of the H-1B visa.Ø Lay-offs and leaving the U.S. An employee who is laid off or terminated is no longer considered to be maintaining H-1B status, despite having an I-94 document which might still be valid, on its face. The employee must leave the U.S. as quickly as possible, as is no official “grace period” or provision for continuing H-1B status while looking for another job.The Players in the H-1B Process and Their RolesA dual representation situation is created in the preparation of an H-1B petition, where our firm has the interests of both the US company petitioner and foreign national employee in mind, in representing both parties together, to obtain the desired visa from the US government.Ø Employer and employee participation. Both the US company petitioner (employer) and foreign national (employee) supply essential information to complete the needed paperwork, submitted to US immigration authorities. Paperwork includes numbered immigration forms, letters, and supporting documentation. Employer signs the immigration forms and a critical support letter, which confirms the temporary offer of employment, and summarizes eligibility for the H-1B. Employer also follows instructions from our firm to ensure compliance with applicable law surrounding hiring H-1B workers, including posting and maintenance of public access files (PAFs). Employer must update the Public Access File with information about benefits, salary changes. Information about recruitment is necessary only if the employer is dependent – see below.Ø Attorney analysis and preparation. The attorney obtains the initial paperwork on a particular employee and determines if H-1B status will be viable based on information presented. The attorney informs the client about H-1B obligations and responsibilities. The attorney prepares the forms and files them with USCIS.Ø Department of Labor. Reviews the Labor Condition Application (LCA) and certifies that the prevailing wage is being paid based on the information provided. DOL also may perform random audits to see if employer requirements in addition to the LCA disclosures are being upheld.Ø US Citizenship & Immigration Services. USCIS receives the filing and determines that the job requirements, the employee's credentials and the employer's viability are all sufficient for approval.Ø Department of State/visits to US Embassy or Consulate abroad. If the employee is abroad after receiving approval of the petition, or is granted consular approval (as opposed to a change or extension of status) the employee must apply for an H-1B visa stamp at a US Embassy or Consulate abroad.Additional H-1B ConsiderationsØ Spouses/Children (Dependents of H-1Bs). Spouses and children may accompany the H-1B principal using H-4 status. Spouses of H visa holders may NOT be gainfully employed but are allowed to attend school and university classes.Ø Duration/Six Year Limit with Limited Exceptions.H-1B status is good for an initial term of up to three-years, and may be extended for a maximum of six years. After six years, the individual must leave the US for one year, unless he/she qualifies for an extension BEYOND six years based on AC-21.Ø Extensions of H-1B status beyond six years. H-1B status may be extended beyond the 6-year limitation, in one-year increments, if a labor certification application (commonly referred to as PERMs or Labors) has been filed at least 365 days prior to the expiration the 6-year limitation. An H-1B may also be extended beyond the 6-year period, in three-year increments, for any person who is the beneficiary of an approved first, second, or third employment-based I-140 petition, but due to per country limitations is unable to file for or obtain his or her immigrant visa. Finally, time spent physically outside of the United States beginning with the first date of H-1B status may be re-captured.Ø Gaps in status/employment. Note to the employee who is going to leave a US petitioning employer: gaps in status between employers are not allowed and will subject the employee to immigration penalties. Immigration penalties include having to exit and re-enter the US to activate H status with the new employer; or problems when the employee tries to adjust status to permanent residence in the US. Try to avoid gaps between employers.Ø Timing of H-1B extensions. An extension with the same employer should generally be started approximately 6 months before expiration so that the individual is not stuck in the US waiting for approval prior to travel (after expiration of the old I-94 card). However, an extension may be filed as late as the day before expiration. If the case needs to be quickly processed, the petition may be expedited with Premium Processing Service for an additional government filing fee, currently set at $1225. Common reasons are filing an extension too close to expiration.Ø H-1B portability (or transfer). A person who was previously granted a visa or otherwise held H-1B status may commence new employment upon the filing of a new petition by the prospective new employer if: (1) s/he was lawfully admitted; (2) the new petition is not frivolous; (3) the new petition was filed before the date of expiration of the period of stay authorized by the AG of the H-1B beneficiary (current I-94); and (4) subsequent to such lawful admission the H-1B beneficiary has not been employed without authorization before the filing of such petition.Additional H-1B Considerations for H-1B Dependent EmployersØ Ratios to calculate dependency. Employers hiring 7 H-1B employees or fewer cannot be deemed H-1B dependent.- 25 or fewer full-time equivalent employees: 8 or more H-1B employees means dependent- 26 - 50 full-time employees: 13 or more H-1B employees means dependent- 50 or more full-time employees: 15% or more are H-1B employees means dependentØ Impact of dependency. Employers who are dependent must not displace U.S. workers at the worksite and must make good faith recruitment efforts.Ø Recruitment required. For dependent employers, good faith recruitment must be done using industry wide standards. Recruitment must take place internally and externally and the employer must offer its open positions to any U.S. workers who apply for the job with equal or better qualifications.Ø Save recruitment efforts. Employers defined as H-1B Dependent must create and maintain documentation of their recruitment efforts. These include copies of recruitment materials or a summary memorandum of effort. Candidate selection process materials must be included or noted in a memorandum in the employer's public access LCA file.Ø Exemption for additional requirements. Even if an employer is H-1B Dependent, he/she may not need to make new attestations or advertise for any new H-1B workers who are exempt by virtue of (a) holding a Master's degree for the field of employment or (b) being paid $60,000 or more per year.