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The move from traditional gratuity payments to the DIFC Employee Workplace Savings (DEWS) has ushered in a new era of clarity and control for end-of-service benefits (ESOB). But with this newfound transparency comes a host of challenges.
For one, managing DEWS contributions is a multi-layered process involving meeting deadlines, tracking contributions, maintaining accurate records, and adhering to regulatory requirements. Without careful attention to detail, these complexities can lead to costly mistakes such as legal penalties, fines, employee dissatisfaction, and reputational damage.
But these oversights aren’t unresolvable. In this guide, we examine common mistakes associated with DEWS contributions and provide practical solutions for accuracy.
Common Mistakes in Managing DEWS Contributions
Below, we explore the costly mistakes that can arise from mismanaging DEWS contributions:
1. Underpayment of Contributions
Underpaying DEWS contributions often occurs from inaccurate employee data, such as tenure, joining and leaving date, probation period, or monthly salaries. For instance, when you miscalculate an employee’s tenure as less than five years when they’ve actually worked for more than five years, their contribution rate will be 5.83% instead of 8.33% for their correct years of service, leading to a lower payout.
Imagine an employee discovering their years of loyalty have been undervalued due to a simple miscalculation. The resulting mistrust can quickly spiral into workplace tensions or even legal battles.
2. Missed Deadlines
The DIFC mandates employers to make all contributions early, usually before the 21st of the following month. Timely submissions build employees’ confidence in your organization. It assures them that their workplace savings are properly and accurately managed.
However, missing the deadline can attract fines of up to $2,000 per employee, regulatory audits, and a bad reputation that damages hiring and employee retention.
3. Inaccurate Reporting
Inaccurate reporting, which creates discrepancies in DEWS records and eventual payouts, is another mistake that happens when managing DEWS contributions. This oversight often stems from omitting vital data, misclassifying employees, or losing contributions and adjustment records.
Poor recordkeeping complicates verifying contributions' accuracy and timeliness, disrupts operations, and diverts focus from strategic priorities.
As Sage’s Changing Face of HR highlights, HR teams already handle heavy workloads. Adding tasks like recalculating contributions and updating records increases the risk of burnout.
4. Failure to Stay Updated
Accurate DEWS calculations rely on timely updates to data and regulations. In other words, HR teams must monitor changes in employee details, submission deadlines, contribution rates, and other DEWS requirements.
Neglecting updates to an employee’s salary, role, or status can cause underpayments or non-compliance. Likewise, failure to adapt to new laws risks outdated practices, causing errors detrimental to organizational growth, compliance, and employee satisfaction.
How to Fix These Mistakes and Stay Compliant
As evidenced by Forrester, 56% of HR leaders are finding ways to reduce payroll errors and improve accuracy, including DEWS management. Here’s how to address these challenges:
1. Ensure Accurate Payroll Integration
Choose a payroll system compatible with DIFC requirements and integrate it with the DEWS platform. Configure the tool to automatically calculate contributions based on the specified rate and employee data while tracking salary changes and employment status updates, such as transitions from probation to full-time employment.
This software integration syncs employee details and simplifies DEWS and payroll processing for precise contributions and payouts. Automation also minimizes manual errors, eliminates inconsistencies in DEWS records, and reduces legal risks.
2. Set Clear Deadlines and Reminders
Use compliance tracking tools or automated payroll solutions to set reminders and receive real-time notifications regarding DEWS. These alerts help you track and meet contribution deadlines, double-check calculations, verify employee details, and address errors before submission.
Integrations like Google Calendar send automated alerts days before deadlines, while, project management tools like Trello allow task assignment and deadline tracking with reminders.
In addition to meeting crucial deadlines, customize your notification system to fit your team’s needs. For example,
- HR teams can receive updates on changes to employee data, such as salary or tenure, enabling prompt recalculations and adjustments.
- Legal teams can be alerted to compliance risks or data inconsistencies for immediate action.
This approach ensures accuracy, compliance, and efficient collaboration across departments.
3. Double-Check Employee Data
Verify employee details, including salaries and tenure, before submitting DEWS monthly contributions to ensure they’re correct. Early detection and correction of errors keep records up-to-date and properly aligned with your payroll system.
To further enhance accuracy, schedule regular meetings between HR and Finance teams to review DEWS procedures and address errors before finalizing contributions.
4. Stay Updated on Regulations
Employment regulations evolve frequently, so stay updated with the DIFC by regularly visiting its official website, reading its handbooks, or subscribing to relevant newsletters. Attending industry workshops, seminars, and webinars related to DEWS policies and other DIFC regulations can also provide crucial insights.
Leverage payroll software with built-in regulatory updates, like RemotePass. Our platform sends real-time compliance alerts and automatically adjusts DEWS calculations in response to regulatory changes. This automations keeps you current with the latest compliance requirements, eliminating the need for manual updates when a new law is passed.
5. Train HR and Finance Teams
Equip your HR and finance teams with the relevant skills to manage contributions accurately and efficiently. Offer periodic training on legal requirements, address knowledge gaps, and share guides, Frequently Asked Questions (FAQs), and other relevant resources for quick reference. Most importantly, encourage your team to stay informed about DIFC compliance standards and labor laws.
6. Use Technology to Streamline the Process
The HR tech market is set to double by 2032, fueled by automation's ability to cut compliance errors by 45% and save time, according to PwC. These perks extend to DEWS compliance, where manually calculating contributions are overwhelming and error-prone.
Nonetheless, using tech solutions presents challenges such as the need for employee training. On top of that, costs of various tools can add up, and some systems require manual updates, increasing the risk of non-compliance.
Investing in automated solutions like RemotePass mitigates these limitations by centralizing HR tasks—employee onboarding, payroll, leave tracking, compliance, and data management—into one intuitive platform. This unified approach reduces costs, saves time, and ensures accurate DEWS calculation without the risk of non-compliance.
Let’s see how RemotePass handles DEWS effectively.
How RemotePass Simplifies DEWS Calculations
- Correct calculations: RemotePass automatically calculates DEWS contributions using the exact basic salary and rates. This minimizes errors and saves time, allowing HR teams to focus on more strategic functions.
- Consolidated data: RemotePass integrates all payroll and employee data into one system for seamless salary input and contributions submission. Ultimately, it simplifies HR workflows and operations, granting easy access to data without the brunt of using multiple platforms.
- Automated audits: Our platform generates real-time reports detailing contribution dates, amounts, withdrawals, specific compliance requirements, and other essential payroll records. HR teams can easily review records during an audit without juggling multiple tabs, paperwork, or spreadsheets.
- Up-to-date records: RemotePass automatically updates to reflect regulatory changes. Our system tracks DEWS contributions, payments, and salary adjustments to ensure all information is current and accurate. Discrepancies are flagged immediately, preventing legal issues and penalties.
- Timely Payments: RemotePass ensures HR and finance teams can submit contributions on time each month, reducing the risk of employee dissatisfaction and penalties for missed deadlines.
Get Error-Free DEWS Contributions with RemotePass
DEWS contributions empower employees with financial security upon leaving their jobs; but errors can jeopardize this.
With tools like RemotePass, DEWS calculations can be accurate and free from compliance risks. Our platform automates every step, from calculating correct contributions to processing timely payments—while also managing pension contributions for GCC nationals and generating payslips.
Satisfy departing employees and protect your business reputation. Try RemotePass today for accurate DEWS calculations and zero legal penalties.
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