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The Ministry of Human Resources and Emiratisation completed its evaluation of the policy framework for the Alternative End-of-Service Benefits Savings Scheme before opening a digital consultation to collect views from across the labour market. Gulf News reported that the initiative hosted on the UAE Government Portal at Sharek.Emarat targeted employees, employers, investors, freelancers and government-sector participants. Stakeholder responses highlighted the need for greater transparency in fund operations as officials prepare to strengthen legal safeguards for all involved parties.
According to the ministry the voluntary scheme invests end-of-service contributions in approved funds to allow potential growth on benefits rather than relying on a static calculation. A MoHRE guidance document outlines how the approach safeguards financial entitlements while offering opportunities for returns through professionally managed investments. The consultation process now focuses on incorporating practical feedback before any further rollout of the framework first introduced under Cabinet Resolution No. 96 of 2023.
Participants in the consultation called for mandatory periodic disclosures from investment funds that would detail returns, fees and associated risk levels at regular intervals. Such measures would help build confidence among employees considering the scheme over traditional arrangements. Respondents additionally sought explicit comparisons that clarify how potential fund performance relates to the established gratuity system so workers can assess regulatory and financial differences.
Under the longstanding system detailed on the official u.ae government portal a private-sector worker who completes more than one year but less than five years of service receives gratuity equivalent to 21 days of basic salary for each year. The entitlement rises to 30 days of basic salary per year for service beyond five years with calculations based on the final basic wage and proportionate payments for partial years. This structure which applies to expatriate employees who form the majority of the private-sector workforce has operated without an investment component leaving accrued sums without opportunity for growth during employment.
The ministry has issued further guidance on the alternative scheme since its initial approval with updates that address employer obligations and compliance steps for enrolment. Legal analyses from firms monitoring the changes note that employers must review payroll and administrative processes to communicate options effectively to staff. Participation remains voluntary for employers at present although the consultation signals ongoing efforts to refine the model for broader application.
MoHRE has emphasised that the savings scheme supports business ease by helping companies attract and retain talent while protecting employee entitlements through accredited investment vehicles. The public input period which closed on February 28 will inform any adjustments to transparency rules and comparison requirements. Officials continue to evaluate contributions to ensure the framework aligns with labour-market needs across the UAE.
