DIFC has amended its Employment Law

DIFC has amended its Employment Law to bring about the end of the current End of Service Gratuity (“EoSG”) regime and replace it with the DIFC Employee Workplace Savings Scheme (“DEWS”).

DEWS will offer a low-cost investment platform that will replace the existing EoSG regime. As of January 1, 2020, all employers in the DIFC will be required to pay (on a monthly basis, so as to ensure that the DEWS for each employee is fully funded) contributions on behalf of their employees into the DEWS, while employees may (at their discretion) also make their own contributions into such a scheme.

The employer contribution rates will broadly follow EoSG contribution rates, i.e., 5.83% (i.e., 21 days / 365) of the basic yearly salary for employees with under five years of service and 8.33% (i.e., 30 days / 365) for those employees with five years or more of service.

Importantly, employees will also be permitted (but not obliged) to make their own payments into DEWS, up to 100% of their salary. Such payments will be made via payroll. While an employee is employed by their employer in the DIFC, they will be unable to withdraw from the DEWS, it is only when they change employers or leave the employment of a DIFC based entity, that the ability to withdraw becomes available.

Employers will have until March 31, 2020, to enroll in a qualifying scheme.