Essentially, the UAE Employment Law grants employees 30 days of annual leave after completing one year of employment. This entitlement allows individuals to take a paid break from work, as specified in Article 29(1) of the Employment Law. Moreover, employers must permit the employees to take annual leave at least once every two years,unless the employee chooses to carry forward the leave or receive payment in lieu of the leave, as outlined in Article 29(8).
Further, the employee may only carry forward maximum of 15 days of the annual leave to the following year or may agree with the employer to receive a cash allowance instead, in accordance with Article 19(1) of Cabinet Resolution No. 1 of 2022.
Therefore, if the employee does not want to utilize her/his entitled annual leave, she/he can agree with the employer to receive cash compensation instead. In this case, if the employer agrees to such arrangement, the employee must be paid the cash compensation based on her/his entire monthly salary. This cash in lieu arrangement applies to the number of unused annual leave days during the employee’s tenure, as specified in Article 29(9) of the Employment Law.
Are you employee or employer in the UAE? Do you want to know more about the cash settlement for remaining annual leave? Drop us an email (office@alphaprimedwc.ae) or give us a call (+971 58 515 2374) at anytime.
