It is difficult for many to count overtime under various labor laws in the UAE. Laws regarding Overtime and working hours in the UAE labor terms are crucial.
Not only do these regulations help to comply with various requirements, but they also manage a justly fair working environment.
This article shall break down the components of how to calculate Overtime in the UAE and examples for easier understanding.
Standard working hours under the UAE Labor Law
UAE law provides that standard working hours of the worker under the private sector shall be 48 hours. This breaks down to 8 hours a day. However, some sectors are not required to abide by this. For example,
Hotel Industry: Being the nature of the sector, workers may be entitled to extra hours during peak seasons. Nevertheless, they are guaranteed overtime pay.
Healthcare: Employees can work long hours for an uninterrupted service, without specific labor laws.
Knowledge of these regular working hours is essential to know when overtime is involved.
When Does Overtime Apply?
There are some scenarios in which overtime is involved. These are:
Working Additional Hours: An employee who works more than the regular 8 hours in a day is supposed to have those extra hours paid with overtime.
Working On Holidays: To those employees who are forced to report to work during the public holidays, overtime rates are paid at higher levels.
Working on days set aside as rest days: If someone is compelled to work during his rest days, overtime payments are awarded.
Special cases e.g. Ramadan: The working hours are usually cut short and reduced for one to work for only 6 hours in a day. Work done over the reduced hours is still overtime.
Overtime Rate Calculation
It is important to know how to calculate overtime in the UAE. The rates of overtime vary depending on whether it is during:
Regular Time Overtime Rate
Work done out of regular working hours overtime include
For every overtime hour earned, employees are paid at 125 percent of his or her basic hourly wage.
Overtime during Rest Days or Holidays
For work done on holidays or days on which they are supposed to rest, the overtime pay is 150% of the normal hourly wage
Example Computations
Let’s break it up into calculations to understand it better:
Case: An individual has a Monthly salary of AED 4,000
- Calculate the Hourly Wage:
- Normal Overtime Calculation
For 3 hours of overtime:
- Holiday Overtime Calculation
For 3 hours of overtime:
These are just some examples of how to calculate OT in UAE rightly and proportionately reward work done.
How to Calculate Overtime in the UAE: Step-by-Step
Calculating overtime is easy as long as you follow the following steps:
Step 1: Find the Regular Hourly Wage
Your regular hourly wage equals the following:
Step 2: Find the Overtime Rate
Determine if the overtime rate is 125% for regular overtime or 150% for work done during holidays or during rest days
Step 3: Calculate your Total Overtime Pay
Multiply the number of overtime hours worked by the identified overtime rate.
Example to Try Clearly
Let’s say an employee is paid AED 5,000 per month:
Overtime Pay for 4 hours
Holiday Overtime Pay for 4 hours
Using this step-by-step procedure makes it easy for employers and employees to determine overtime pay.
Special Conditions for Certain Workers
Most workers fall under the general overtime provisions; however, there are a few exceptions with their special rules:
Managers and Executives
Above that, it is possible to have management employees or executives are bound to be left out on pay overtime. The employer has to be well conversant with the applicable legal definitions defining what a manager’s employee is.
Daily Transport Time and Emergency Work
At times, overtime in the performance of emergency work or tasks that require prompt attention are otherwise. For example, even though an employee is required to come to work during off-hours on a call, the proper overtime rules that apply for emergencies also need to be complied with.
Penalties for Non-Compliance
The UAE imposes significant penalties on employers on the grounds of breaches of labor laws concerning overtime. Some of these penalties are as follows:
Fine: Fine for the failure to meet the required overtime standards
Legal: Employees can take an employer to court for overtime.
Denomination: There are possibilities that the reputation of a firm may deteriorate and it brings bad morale among employees too as well as among others.
In order to steer clear of all these things, employers should keep proper accounts of work hours and overtime to authenticate the productivity of their work.
Tips for the Employer and Employee
For Employer
Create Hours Tracking System: It can be achieved through any software or other ways to track the time and overtime of the employees.
Update yourself with the labor laws and codes, which means you have to be in compliance.
Communicate with Staff: Engage staff regularly on issues of overtime policies or expectations
For Employees
Know Your Rights: Familiarize yourselves with your rights on overtime pay, such as when you will get your overtime.
Maintain records of your working hours. Your record shall include personal records of your work hours, including overtime worked.
Raise Concerns Immediately: If any problem arises with payment for overtime, raise it with the employer right away.
Frequently Asked Questions
Can overtime be claimed by part-time workers?
Yes. For surpassing the agreed upon work hours, part time employees can claim overtime. This overtime will be worked on their normal hourly rate.
If an employer does not pay the overtime?
Employees must first address the issue with their employer. If the issue cannot be resolved, they may file a complaint with MoHRE and seek redress.
Can overtime apply to workers within free zones?
Overtime could be treated differently for employees within free zones. The specific laws of each free zone should be consulted to identify the applicable rules concerning overtime.
Conclusion
Knowing how to calculate overtime in the UAE does not matter if the labor law process is not known inside.
Employers and employees must know what’s inside when each of them really knows the labor law process.
All of them knowing about labor law gives sense to fairness and, as a result, a good workplace.
Employees should know their rights and employers should follow the rules. In this case, it would be beneficial to work together towards creating a comfortable workplace.
