UAE: New Guidelines for Businesses Employing Expats

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The UAE government has introduced new guidelines for employers to deal with issues resulting from the coronavirus pandemic, relating to salary reductions, layoffs, and bankruptcy.

Many people in the UAE, where the workforce is predominantly foreign and on limited-time residence visas, have been unable to go to work due to a lockdown imposed by the government. The dramatic slowdown in economic activity caused by coronavirus measures has put huge pressure on the cash flow of many small companies, threatening widespread redundancies.

The Ministry of Human Resources and Emiratization said that companies affected by the “precautionary measures” must take certain steps before cutting the salaries of or laying off any employee. The steps are as follows:

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* Have employees work remotely.

* Give employees paid leaves.

* Give employees unpaid leaves.

* Cut salaries for the period of the measures.

* Permanently cut salaries.

Businesses seeking to permanently reduce the salary of an employee are required to get approval from the ministry, the ministry said.

Under usual circumstances, foreign employees who lose their job have their residence cancelled by their sponsors and are often forced to return to their home country. However, for the duration of the coronavirus crisis, the ministry said companies that cannot afford to pay their foreign workers must register the employees’ information in an online portal called the Virtual Labor Market to match them to other employers. If they are matched to alternative jobs, they would be allowed to move easily to the new job, even while remaining under the sponsorship of the original employer, the ministry said.

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The decisions only apply to expatriates and during the period of application of the coronavirus precautionary measures, the ministry added.

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