Amendments to DIFC Employment Law: Recent Changes

Amendments to DIFC Employment Law: Recent Changes

Recent amendments to the DIFC Employment Law, enacted through DIFC Law No. 1 of 2024, bring significant changes effective from March 1, 2024, with enforcement starting on March 8, 2024. These amendments address Qualifying Scheme contributions and end-of-service gratuity accrual, impacting UAE/GCC nationals and sanctioned persons.

Previously exempt, UAE and GCC national employees within the DIFC are now obligated to participate in Qualifying Schemes. Employers must ensure equitable treatment by comparing Core Benefits payable to non-UAE/GCC national employees and making top-up pension contributions for eligible nationals. Failure to comply may result in penalties of up to USD 2,000 per affected employee.

Furthermore, the Amendment Law mandates the accrual of end-of-service gratuity for employees designated as 'Sanctioned Persons'. Employers must continue accruing benefits until the individual or employer is no longer classified as such, or until termination, whichever comes first. Upon termination, accumulated benefits must be transferred to a Qualifying Scheme or directly to the departing employee.

These amendments aim to promote fairness and compliance within the DIFC employment landscape. Employers are urged to promptly adapt to these changes to avoid penalties and uphold the rights of their employees.