Employers to be fined for failing to contribute to pension fund

GPSSA urges employers to register employees within a month of hiring them

A GPSSA circular published in a newspaper on Wednesday says: “GPSSA is issuing this notice to bring to the attention of all employees in the private sector that, under Federal Law No. 7 of 1999 (Pension Law), employers are required to register their UAE national employees within one month from their date of joining date, after which contributions must be deducted and paid to GPSSA.

Failure to register the employees and pay the contributions on the due dates renders the employers liable to fines as stipulated by the Pension Law,” the circular said.

UAE nationals are entitled to a pension after 20 years of work. In order to provide the pension, the GPSSA requires the employer and the employee to contribute monthly payments of 12.5 per cent and five per cent respectively of the employee’s salary.

While the majority of big companies have registered their employees, a small percentage of them and some medium and small fail have failed to do so.

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About the author

Kazim Ladimeji is the Director of thecareercafe.co.uk—a resource for start-ups, small business and job seekers. It includes a blog with career and small business advice articles. Kazim is a Chartered Member of the Chartered Institute of Personnel and Development, and has been a practising HR professional for 14 years.

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