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The Dubai International Financial Centre (DIFC) and Abu Dhabi Global Market (ADGM) operate under robust regulatory frameworks distinct from broader UAE labor laws. These regulations govern the implementation of time-off policies, specifying various leave types, each with its eligibility criteria, payout provision, and accrual rules.
HR teams and business owners looking to comply with DIFC and ADGM regulations must navigate these nuances carefully, as some leave policies may overlap, creating confusion or inconsistencies in applications.
In this guide, we cover the intricacies of time-off policies specific to the legal frameworks of DIFC and ADGM. Whether you aim to prevent employee burnout or provide attractive benefits, you’ll learn how to create effective and compliant time-off policies with automated solutions like RemotePass.
Essential Elements of Time Off Policies in ADGM and DIFC
Here are key elements of time-off policies HR teams in DIFC and ADGM companies should pay attention to:
Accrual and Carry-Over Rules
The DIFC and ADGM have similar provisions regarding leave accrual. In both centers, an employee’s annual leave accrues monthly during their first year of employment at the rate of one-twelfth of the employee’s annual leave entitlement.
DIFC employees may carry over a minimum of five business days into the next year, but the unused leave expires after 12 months. The same is true for ADGM. However, the proposed changes to the ADGM employment regulations allow employees to carry over a maximum of ten business days of leave into the following year.
During the first year, employees can only take the number of days they’ve accrued. Employers must pay for any unused leave upon termination, while any leave taken beyond the accrual can be deducted from final payments.
Requesting Time Off
Per DIFC and ADGM labor laws, employees must provide at least seven days' written notice for time-off requests, unless the employer specifies otherwise. Employers may require employees to take leave on specified dates with seven days’ written notice.
Alternatively, the employer and employee can mutually agree on the time-off dates. In this case, the seven-day notice requirement doesn’t apply.
Approval Process
Before approving or denying a leave request, the HR manager needs to review it, considering factors like workload impact, scheduled project deadlines, company policy, leave balance, other absences within the company, and staffing coverage.
After such review, communicate your decision to the employee immediately, including reasons for denial and alternative dates if applicable. Once leave is approved, document properly to ensure compliance and prevent disputes.
Documentation and Record-Keeping
Accurate record-keeping is essential for compliance with DIFC and ADGM laws, avoiding penalties and enabling efficient leave planning. Moreover, it prevents disputes and empowers workers to confidently plan their time off, knowing their exact leave balance, dates, and status of their requests.
Specific Time Off Requirements for DIFC and ADGM
DIFC and ADGM are independent jurisdictions with unique legal frameworks. Below, we explore their specific regulations concerning employee leave entitlements, highlighting their similarities and differences.
Annual Leave
In DIFC and ADGM, Employees with 90+ days of service are entitled to 20 working days of paid annual leave. This leave accrues from the beginning of employment and increases with years of service. However, in ADGM, employers must allow employees to take annual leave for one week or longer. This ensures employees take meaningful rest rather than fragmented time off.
Employees are expected to take their annual leave the year it falls due. Furthermore, an employee cannot request payment in place of annual leave. However, if their employment ends, the employee is entitled to payment for any accrued but unused leave days.
Public Holiday
Employees in DIFC and ADGM are entitled to full pay during all national holidays announced in the UAE. An employee who works on a public holiday is entitled to their daily wage in addition to any of the following:
- A compensatory time off to replace the holiday worked.
- An extra day's pay equal to the employee’s daily wage.
- A prorated amount of their daily wage based on hours worked during the holiday.
Public holidays coinciding with an employee’s annual leave are not included in the time off.
Sick Leave
In DIFC and ADGM, an employee is entitled to a maximum of 60 days’ sick leave per year, which can be consecutive or intermittent. Employees on sick leave are paid their full daily wage for the first ten business days, half-pay for the next 20 working days, and unpaid for 30 working days or more within 12 months. However, in ADGM, employees with less than one month of service are ineligible for sick pay.
If an employee takes more than 60 working days of sick leave within 12 months, the employer may terminate their employment. However, this doesn’t apply in cases where the employee takes sick leave due to a disability.
Maternity Leave
In the DIFC and ADGM, female employees who have been employed for at least 12 months are entitled to 65 working days of maternity leave following the birth or adoption of a child. This applies if the child is under three months old in ADGM or under five years old in DIFC.
Employees must notify their employer at least eight weeks before the expected week of childbirth. She must also inform her employer in writing at least 21 days before the proposed maternity leave date.
Additionally, employees on maternity leave receive their full daily wage for the first 33 days and half pay for the next 32 days. Employees are not entitled to payment for any unused maternity leave.
Paternity Leave
Male workers in DIFC and ADGM are granted five consecutive working days of paternity leave paid at 100% of their daily wage. However, each jurisdiction has its different specifications.
For example, under DIFC, paternity leave must be taken within a month from the date of childbirth or adoption, and the employee must be working continuously with their employer for at least 12 months. For ADGM, on the other hand, paternity leave must be taken within two months from the date of childbirth.
In both jurisdictions, paternity leave has the same notice period as maternity leave. Unused maternity or paternity leave is not compensated.
Special Leave
Muslim employees in DIFC who have worked continuously for at least one year with an employer are entitled to an unpaid leave of 21 days to perform the Hajj pilgrimage once during their employment.
For ADGM, Muslim employees with at least one year of continuous service are entitled to unpaid leave of up to 30 days, once during their employment, to perform the Hajj pilgrimage.
Why Compliance is Vital
Aligning your time off policies with DIFC and ADGM laws is essential as infractions can lead to fines, penalties, and employee dissatisfaction, which may disrupt business operations and cause reputational damage.
For instance, the new DIFC Employment Law fines up to $2,000 or $10,000, depending on the severity or number of violations. Similarly, when an employer doesn’t grant leave pay to an employee, ADGM permits aggrieved employees to take legal action, and the court will order the employer to pay the full amount owed or fair compensation.
Besides, aligning policies with both jurisdictions helps businesses provide fair leave entitlements for employees. Ultimately, this alignment strengthens team trust and improves retention.
Best Practices for Creating Comprehensive Time Off Policies
Now that we’ve covered the essentials, let’s explore best practices to refine your time-off policies.
Tailor Policies to Company Culture
In addition to considering labor laws, tailor your time-off policies to your company’s values and processes. When policies reflect an organization’s values—say, work-life balance or productivity—they become part of the company culture, making it more attractive to employees. For example, a company that values work-life balance may offer flexible annual leave policies or generous parental leave to show that it prioritizes employees' mental and physical health.
Engage Employees in the Policy-Making Process
As Nectar, an employee recognition software, reports, 84% of employees agree recognition motivates them to succeed at work. An excellent way to recognize employees is to ensure they participate in creating policies that impact their work-life balance. This works through methods such as anonymous surveys, focus groups, Q&A feedback sessions, and pilot programs.
Beyond making employees feel valued, involving them in policy-making reveals valuable insights into their needs and preferences. Their input helps create practical and inclusive time-off policies that reflect your workforce’s needs.
Clearly Communicate
Clearly communicate your time-off policy to employees, including crucial details such as the number of days off employees are entitled to, how to request time off, leave balance, and eligibility criteria. Share policies through interactive sessions, team meetings, email, employee handbooks, or internal newsletters.
Also, train managers on DIFC and ADGM legal regulations regarding employee rights and employer obligations. And encourage them to introduce time-off policies to new hires during the onboarding process so they understand their leave entitlements and how to access them.
Regular Review and Updates
Labor law changes can affect leave entitlements. To seamlessly navigate these changes, stay informed and periodically modify policies to ensure compliance and avoid legal complications. Also, changes in the workplace environment and employee expectations may require updates to existing time-off policies. For instance, transitioning from in-office to remote work or a hybrid model may necessitate adjusting your leave policies to reflect these changes.
Implement a Technology Solution
Manually managing leave requests and tracking time-off balances can result in inefficiencies, delays, and errors. To avoid these lapses, use HR software like RemotePass and simplify your leave management system. Keep reading to see...
How to Leverage RemotePass for Compliant Time-Off Management
RemotePass is an all-in-one system designed to handle all your HR needs, including hiring, onboarding, payroll, benefits administration, and leave management.
Our time-off policies feature integrates with your leave management strategy, offering:
- Streamlined management of time-off requests and approvals: RemotePass allows managers to seamlessly review and approve or deny leave requests transparently on a centralized dashboard. This smooth approach helps companies comply with DIFC and ADGM regulations by automating record-keeping and ensuring policies align with legal requirements. In addition, transparency eliminates misunderstandings and even legal action from dissatisfied employees.
- Integration with payroll and employee records for seamless tracking: RemotePass seamlessly integrates with your payroll systems, offering detailed time-off reports for improved tracking, planning, and resource management. For example, our system helps you monitor used or accrued leave days per employee and apply carry-over rules to manage leave balances effectively.
- Real-time notifications for employees and managers: Since DIFC and ADGM labor laws are dynamic, staying up-to-date is crucial for compliance. RemotePass takes the burden of constantly monitoring regulatory changes off HR teams. It provides real-time updates about leave management, ensuring both employees and managers stay informed about available leave days, get instant updates on policy changes, and adjust accordingly.
Use RemotePass to Create Compliant Time-Off Policies
Developing an effective time-off policy for DIFC and ADGM companies doesn’t have to be overwhelming or risky. With RemotePass, you can easily create custom policies for various leave types—whether country-specific or universal—ensuring full compliance and simplicity. Streamline your leave management with comprehensive, automated policies that save you time and reduce administrative burden. Start optimizing today with RemotePass.
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