New GPSSA Rule: Register Emirati Employees Within 30 Days Of Hiring

The General Pension and Social Security Authority (GPSSA) has issued a directive for employers in the UAE, mandating the registration of Emirati employees in accordance with Federal Law No.57 of 2023. This law, concerning pension and social security, outlines specific requirements and deadlines for employers regarding their Emirati workforce.

Under the new federal law, employers are required to register their Emirati employees with the GPSSA within 30 days from the start of their employment. Additionally, employers must report to the GPSSA the names of insured Emiratis whose service periods have ended within a 15-day timeframe. Failure to comply with these requirements will result in a penalty of AED200 per day for each employee, multiplied by the number of insured employees within the entity.

The responsibility of making contribution payments falls squarely on the shoulders of employers. They are obligated to submit necessary statements, data, or documents, including salary details of the insured, to the GPSSA within ten days. This enables the calculation of prearranged contributions as stipulated by federal law. Delays in this process attract a fine of AED100 for each day overdue, again multiplied by the number of insured individuals.

It is crucial that contributions begin from the date an employee joins an entity, regardless of whether this occurs mid-month or if the employee leaves before month-end. Payments must be transferred at the start of each month, with a grace period extending up to 15 days. Late payments incur an additional charge of 0.1% of the due contributions for each day delayed, not exceeding the total contribution amount.

Calculating Contributions

Contributions are calculated based on actual salaries. For private sector employees, this is determined by the January contribution account salary each year. Should an employee join post-January, contributions are calculated based on the salary at the time of joining until the subsequent January. Government sector employees' contributions are calculated monthly based on their actual contribution account salary.

Employers failing to pay contributions on actual salaries face an additional 10% charge on the value of due contributions without prior warning or notification. The GPSSA’s Board of Directors retains discretion over exemptions from these charges, whether in full or part.

Provisions for Newly Naturalized Emiratis

The registration requirements extend to individuals who have acquired Emirati nationality while employed by entities subject to this law. From the date of obtaining citizenship, these individuals must register with the GPSSA. However, they have the option to merge previous employment years towards a higher pension and/or end-of-service gratuity as outlined in Article (8) of the federal pension law.

This comprehensive approach by GPSSA under Federal Law No.57 of 2023 aims to ensure that all Emirati employees are duly registered and that their pension and social security contributions are accurately calculated and promptly paid. Employers are urged to adhere strictly to these provisions to avoid penalties and ensure compliance with UAE federal law.

With inputs from WAM