Sunday, 18 April 2021

Overtime calculation in UAE during Ramadan

During Ramadan the work hours for all companies in UAE are reduced by two hours. Most of the companies pay the overtime for extra hours the ...

During Ramadan the work hours for all companies in UAE are reduced by two hours. Most of the companies pay the overtime for extra hours the employees working during the holy month of Ramadan.

We are here to help you understand what is the rate applied for the calculation of overtime?

Some people have the problems like their manager or owner doesn't reduce their timings and are in doubt of whether they are eligible for overtime.

We show you how you can calculate the overtime and how to claim the amount if your company is not ready to pay.

The below law is applicable for regular companies in UAE and not for free zone companies.

Calculation of Overtime

For example if the basic salary is 3000 AED and normal overtime of 50 hours and holiday OT of 20 hours. Then what will be your total salary.

3000×12÷365÷8×1.25 = 15.41 over-time pay per hour.

Now total overtime hours X per hours over-time pay

50 X 15.41 = 770.50 total overtime pay

Formula:– Basic salary+ basic salary ×12/365/8 × total hrs overtime ×1.25 = Monthly salary.

Calculation overtime from 9 pm to 4 am or public holiday or friday

If you are working between 9pm to am on a normal day, the time worked includes in overtime and company has to pay 50% more than the normal working hours. The same formula is used public holidays and fridays also.

Formula:- basic salary ×12÷365÷8 X total overtime hours X 1.5 = overtime amount

3000x12÷365÷8×1.5×20= 369.86

So you will get a salary of 3000 basic plus normal OT amount 770.50 plus holiday OT amount 369.86 = Total Salary Aed 4,140.36

How to Claim the Amount

In the case of your employer is not ready to pay you overtime salary for extra hours worked during the holy month of Ramadan, you can file a complaint with the MOHRE. In the event of submitting a complaint you will need to prove with necessary document evidence like time sheet signed by your manager which shows that you have worked extra time than the regular hours of work during the holy month.

Laws regarding overtime

Federal Law No. 8 of 1980 Regulating Employment Relations in the UAE (the ‘Employment Law’) is applicable for the above situations.

Reduction of daily working hours by two hours during the holy month of Ramadan is in accordance with Article 65 of the Employment Law, which reads as: “The maximum normal working hours for adult employees shall be eight hours per day or forty-eight hours per week. However, working hours for the employees of commercial establishments, hotels, restaurants, watchmen and similar operations may be increased to nine hours per day as determined by the Ministry of Human Resources & Emiratisation. Likewise, working hours per day in respect of hazardous work or work detrimental to health, may be decreased by decision of the Ministry of Human Resources & Emiratisation. During the month of Ramadan, normal working hours shall be reduced by two hours…”

The Ministry of Human Resources & Emiratisation (the ‘MOHRE’) however states that employers who do not follow the rules regarding two (2) hours of reduced working hours during the holy month of Ramadan should pay overtime salary to its employees.

Overtime salary may be calculated per the provisions of Article 67 and Article 68 of the Employment Law. Article 67 of the Employment Law states: “If circumstances of work necessitate that an employee works more than the normal working hours, the extra time shall be considered overtime, for which the employee shall receive remuneration equal to that corresponding to his normal working hours plus an extra of at least 25 per cent of such remuneration.”

Further, Article 68 of the Employment Law states: “If circumstance of work necessitate that an employee works overtime between 9pm and 4am, he shall be entitled to normal working hours pay plus an increase equal to at least 50 per cent of such pay.”

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