Employee benefits are one of the key areas of HCM management in Dubai. As regulatory frameworks are constantly adjusted to serve the best interests of employees, with fair, transparent, and just treatment, compliance with them in a company’s HR and payroll system is crucial. It involves many sensitive issues that, if overlooked, can result in legal consequences.
On February 1st 2020, the statutory end-of-service gratuity (EOSG) regime for expatriate workers was replaced by the DIFC. The DIFC Employment Law No. 2 of 2019 was amended pursuant to the Employment Law Amendment Law, DIFC Law No. 4 of 2020, and the Employment Regulations 2020 (the Amendment Law) required employers to make contributions to the DIFC Employee Workplace Savings Plan (DEWS) or that of an alternative qualifying scheme (AQS) (DEWS and AQS together constituting, a Qualifying Scheme).
The primary aim behind this regulatory initiative is to reduce the risks for employees associated with DIFC employers failing to take account of EOSG liability on their balance sheets and will provide protection against the consequences of the insolvency of employing entities.
One of the common questions we get as one of the pioneer providers of solutions for effective payroll and HCM management in Dubai is if our payroll offering complies with DEWS.
This article will share a simple guide on what DEWS compliance in Dubai is, its key features, benefits, and the essential role it plays in enhancing the financial security of employees in the DIFC, along with how we assure this compliance in our payroll service offerings.
Whether you’re an employer or HR manager navigating compliance requirements or an employee seeking to understand your new benefits, this guide will provide all the necessary information you need to stay informed and make the most of the DEWS programme in Dubai.
What Exactly Is DEWS?
The DEWS (Dubai Employee Workplace Savings) plan is a progressive end-of-service benefits plan introduced by the DIFC (Dubai International Financial Centre) to restructure the current employee benefit plan into a funded and professionally managed, defined contribution plan.
The DIFC is a special economic zone in Dubai, UAE that has its own regulatory framework and financial laws concerning employment, which are different from the broader UAE labor laws. This makes DEWS plan only applicable and designed for employees working within the Dubai Financial Centre (DIFC).
The initiatives behind DEWS act as a professionally managed savings plan that replaces the traditional end-of-service gratuity plan. It offers a voluntary or optional savings plan, that lets employees working in the DIFC to secure their financial future more easily.
DEWC is a regulated scheme that allows your employer to fund your end-of-service benefits, and you’ll be entitled to receive a payment from DEWS at the end of your service. Besides this, you can also choose to make voluntary contributions through salary deductions while you are employed, allowing you to stretch your personal savings too. This means that you get to define how DEWS works for you.
Employer Contributions
The employee contribution to DEWS is based on the length of your service and basic salary. Generally, it is 5.83% for employees with less than 5 years of service and 8.33% for those with 5 years of service or more.
Employee Contribution
As an employee on your end, you can also contribute to make additional savings through salary deductions. This is completely optional, meaning you are in full control and can choose an amount and frequency that works best for you.
The Importance of DEWS for Employers And Employees
For employers, the DEWS solution will:
- Help in attracting the best talent in the market by offering an attractive benefits scheme, where they will be able to earn returns on their benefits from a regulated and reliable plan administrator.
- Creates greater cash flow certainty with end-of-service benefits entitlements spread over their employees’ tenure.
- Get access to a world-class, cost-effective solution that will be based on their current salary instead of their final salary.
- Have full clarity and accountability on HR’s end-of-service liability to employees at all times, with the assurance of no further obligation once the payment is cleared.
For employees or members within the DIFC, the DEWS solution will:
- Help in having more visibility of their end-of-service benefit (EOSB) entitlement and certainty of payment.
- Have the chance and benefit to make voluntary savings in addition to employers’ contributions to secure their long-term savings goals.
- Have greater freedom to decide how their savings will be managed, catering to diverse risk appetites and including Sharia’s compliant options.
- The benefit of having their contributions professionally managed in a low-risk, cost-effective and flexible manner with the opportunity to earn steady returns.
BSH Approach to DEWS Compliance in Payroll Offerings
As one of the leading solution providers for payroll and HCM in Dubai, BSH has been at the forefront of providing companies with what they need as a result of regulatory changes. This is no different when it comes to integrating DEWS compliance. Our payroll solutions are tailor-made to the nature and type of your organisation, applicable laws, and relevant HR practices in place.
We offer comprehensive DEWS integration for DIFC-based companies. Our payroll offerings will take care of DEWS compliance in all aspects of the scheme, ensuring that your organization remains compliant while providing employees with the benefits they deserve.
Our key offering to comply with DEWS includes the following:
Seamless Registration and Onboarding
We have simplified the registration and onboarding process for DEWS in our offering for payroll and HCM management in Dubai. We will guide HR managers and employers through the necessary steps to enrol in the scheme. From documentation to handling relevant administrative tasks, we will ensure a smooth transition and compliance from the outset.
Accurate Contribution Management
With the use of advanced algorithms, our payroll system can calculate DEWS contributions by the employer and employee accurately. By integrating these contributions into your regular payroll system, we will ensure the timely release of remittance to the DEWS fund, keeping you in compliance with established regulations.
Detailed Reporting and Reconciliation
No cost goes untouched. Our payroll offering and all other services catering to HCM management in Dubai take transparency and accuracy seriously. We will provide detailed reporting on DEWS contributions, investment performance, account balances, or any other information you may need. Our payroll also follows a regular reconciliation process to ensure all contributions are accurately documented and deviations or discrepancies are promptly addressed.
Regulatory Compliance
Staying up-to-date with the latest regulations is crucial. BSH continuously monitors updates from DIFC authorities, ensuring that our payroll systems and processes are always aligned with current laws. This proactive approach mitigates risks and ensures ongoing compliance.
Employee Communication and Support
Educating employees about their DEWS benefits is essential for their financial planning and peace of mind. BSH offers comprehensive communication support, including educational materials, informational sessions, and dedicated helplines to answer employee queries about the DEWS plan.
Integration with HR Systems
To enhance efficiency, BSH integrates DEWS compliance features with existing HR systems. This integration ensures seamless data flow between HR and payroll functions, reducing administrative burdens and minimizing errors.
Payroll Solutions Simplifying DEWS Compliance
Discover how BSH can streamline your payroll processes and ensure DEWS compliance by visiting BSH Payroll Services. Let us help you navigate the complexities of HCM management in Dubai, providing your employees with the benefits they deserve while you focus on your core business operations.BSH’s commitment to quality and innovation ensures that your payroll processes are not only compliant but also optimized for maximum efficiency and employee satisfaction.
