The UAE’s Pension Authority raises awareness on incorrect contribution practices that result in penalizing private sector entities
Abu Dhabi, 27th December 2022: Private sector entities that do not pay monthly contributions or provide incorrect data for their Emirati employees risk incurring additional penalties and under certain conditions imprisonment, as per the federal pension and social security law.
At the end of its campaign to educate insured Emiratis and the entities in which they are employed about an insured’s rights and duties in accordance to the NAFIS program, the General Pension and Social Security Authority (GPSSA) stated that charging an insured person with a percentage greater than the due contribution percentage or failing to pay expenses altogether results in a fine of Dh5,000 for each insured person. A court ruling is immediately taken in order to oblige entities to return excess amounts to their insured employees.
"Employers are fined for every Emirati employee not registered with the GPSSA and bears the responsibility of contributing on his/her behalf retroactively and paying the due contributions as per the employees start date,” stressed the GPSSA in a statement.
According to the pension and social security federal law, salary contributions are due in the beginning of each month and may be extended until the 15th of the month. The provisions of Article 13 of the law states that monthly pension contributions are not refundable and any delay in paying contributions beyond the specified dates results in mandating the company/entity owner to pay an additional amount at the rate of 0.1% of the contributions due for each delayed day and without the need to send a warning, as per the provisions of Article 14.
An additional amount of 10% is charged from the value of due contributions on entities that pay contribution amounts based on an incorrect salary in order to avoid paying contributions at a higher rate or to those who fail to pay due contributions for some or all of their employees. Moreover, employers risk imprisonment and a fine not more than Dh5,000 for each employee, if the entity sends incorrect data or refrains from providing information; all practices that are considered illegal.
