Foreign investors and international companies might be interested in starting up a new business in the Middle East. As it may occur in many other fields, it might be difficult when trying to do it on your own. That’s the main reason why you should count on PEO & Payroll solutions in the United Arab Emirates (UAE) offered by Connect Resources.
Our expertise in the field, the connection with local HR managers & specialists, and the unbeatable pricing offered to customers will rank us #1 in your choices.
Is it the first time that you are investing in the United Arab Emirates? Let us talk to you for a couple of minutes and pay attention to the following details:
- PEO vs EOR. Definition and Meaning,
- Staff related frequently asked questions FAQ,
- Types of Professional Employer Organization & Payroll solutions offered.
1-. What’s the meaning and definition of PEO?
The term stands for Professional Employer Organization and it was first coined in 1993, although its definition has varied since then. We could also refer to it as an entity.
Despite the global use that it could receive, today we will analyze it from the UAE’s point of view. This organization based either in Dubai or Abu Dhabi gets into a contractual agreement with a foreign customer for employee responsibilities.
That is to say that the company is in charge of dealing with the customer’s workforce. These employees, either shared or allocated, are the ones subject to the agreement.
Companies that deal with PEO & Payroll solutions in the United Arab Emirates (UAE) are entitled to enforce only those employer rights. They are subject to only those obligations specifically allocated under the agreement signed.
In addition, these are specific characteristics about the laborers:
- The leased employee provides services under an agreement between the customer and the leasing organization, Connect Resources.
- Employees provide services to the customer, whoever it is, according to the contract signed. It could be either a full-time job or a part-time one.
- All services performed are subject to the direction & control of the client.
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PEO vs EOR. What are the main differences?
Now that we’ve introduced you to PEO, it should be interesting to define what EOR is and the main differences that exist between those two categories.
EOR stands for ‘Employer of Record‘. It refers to a third-party entity located in the United Arab Emirates, either in Dubai or Abu Dhabi, that takes responsibility for all employees’ contracts on behalf of another company which is usually an international organization.
Despite the terms may look similar, there are some basic differences that we will summarize in the next bullet points:
- An EOR company in the UAE takes part of the business and its employees on the organization’s payroll, whereas a PEO takes full responsibilities over the employees. It provides all Human resources’ tasks.
- Moreover, if you hire PEO services the organization hiring Connect Resources holds the employment contracts. On the other hand, employees’ contracts and salaries are kept by the EOR when dealing with this sort of HR consultancy in the UAE.
2-. Important facts about employment contracts within the United Arab Emirates
As you may understand each country works differently. Consequently, there is something that you have to take into account before starting a business within the United Arab Emirates.
Don’t worry, everything is under control. Our PEO & Payroll solutions in the United Arab Emirates, UAE will help you deal with the situation.
Here is some information that you should read:
2.1-. What are the legal UAE’s working hours & days set for employees?
Similar to what happens in many other Muslim countries such as Bahrain, Qatar, Kuwait or Saudi Arabia the working days are usually set based on religion.
Friday is the official prairie day. Consequently, employees either take the day off or receive permission to attend the mosque during certain hours. Saturday is another common day off, although it may depend on each business.
The maximum length of time that workers are allowed to labor is 48 hours. This amount should be distributed among eight hours maximum per workday.
This is a common consensus, but it may depend. International companies may offer their employees Saturday and Sunday off, as well.
If HR departments in Dubai or Abu Dhabi require members of staff to work on Friday, the employer must offer another day off or pay 1.5 times his or her normal rate of pay.
What about the Ramadan season? It will vary year after year as the calendar is never the same, but working hours have to be reduced by two hours per day.
2.2-. What are the UAE’s public bank holidays?
What an interesting question! This is one of the most relevant job-related things to have in mind while a contract is in place.
- NYE, celebrated 1st January in almost every country around the world.
- Eid Al-Fitr marks the end of Ramadan. The public bank holiday will depend on whether the calendar sets 29 or 30 days for the Ramadan period.
- Arafah Day, the second day of Hajj, or pilgrimage. This day is celebrated on the ninth day of Dhu Al-Hajj, according to the ‘Hijri calendar.
- Eid Al Adha is one of the two Islamic festivities. Muslims celebrate it on the 10th day of Dhu Al Hajj.
- Hijri is the Islamic New Year. 2020 takes place on Thursday 20th August, and it will be celebrated Tuesday, August 10th next 2021.
- Commemoration Day, also known as Martyrs’ Day. It is celebrated all across the United Arab Emirates on December 1st and it recognizes the sacrifices and dedication of Emirati martyrs.
- National Day, which takes place on December 2nd.
2.3-. How are maternity and paternity leaves according to UAE’s laws?
Those women who gave birth are entitled to maternity leave. If they have continuously worked for the same company over a whole year, they will receive 45 days of permission.
In case she hasn’t completed the whole year period, she’ll receive the same days although the salary will differ. She’ll then receive half payment
In case an extension is needed, those female workers may request 10 more days after the period is completed. Of course, this period won’t be compensated.
What about nursing? For up to 18 months after giving birth, they could use two breaks per day. The timing for each period is 30 minutes.
The United Arab Emirates does not consider at this moment paternity leave, although private companies working within PEO & Payroll solutions in the United Arab Emirates, UAE usually incorporate exceptions.
2.4-. What’s the situation like if you are fired in the United Arab Emirates?
Severance is granted in the following case scenarios for employees who have labored for more than one year:
- From one to five years of work, your compensation will be of 21 days.
- For every year after the first five, you’ll get 30 days.
If an employee resigns or if he/she signed an indefinite contract with no end-date, then the following rules apply:
- For contracts between 1 and 3 years, employees will receive 1/3 of 21 days’ salary.
- Employees who worked between three and five years of service, they’ll be granted 2/3 of 21 days’ salary.
- More than 5 years of the contract, the whole circle will apply. 21 days will be offered.
2.5-. UAE’s policy on Sick Leave and holidays
What happens if a worker needs to stay home because of stomach ache, high temperature, or any broken/sprained bone? Foreign workers usually count on private insurances.
Employees who call their HR consultancy in Dubai are eligible for up to 90 days of sick leave per year. Of course, this sort of compensation takes place once they have worked in the company for at least three months. Staff members are also covered during any probationary period, which usually takes 6 months.
What are the rates and compensation when you are on sick leave?
- First fortnight (15 days), full wage
- After these two weeks, the employee will receive half of the amount that he/she is entitled to per contract.
- The rest of the time, they won’t receive anything.
All the above case scenarios will cover expenses for unfortunate situations, but if the employee’s misconduct, they will not receive the opportunity to apply for sick leave.
Connect Resources takes care of their employees, but we are not responsible for any wrongdoings.
Similar to what happens in many other countries, employees may request holidays. They could enjoy up to 30 days per year, but it will all depend on each organization.
Imagine you want to travel when the rest of the staff is on holiday. Do you think that the PEO & Payroll solutions in the United Arab Emirates will allow you to leave? Probably not! That’s why is important to plan your holidays ahead of time if you are traveling far from Dubai or Abu Dhabi.
3-. PEO & Payroll solutions in the United Arab Emirates UAE
What makes Connect Resources unique is its expertise in the field. Our HR managers, specialists, and assistants will take care of your business from the first minute.
We know how complex it might be to deal with local taxes involved in payroll services. Let’s see how our human resources team members could help your organization. Connect Resources will:
- Pay any third party involved with your organization. No matter how many of them request your payments, we’ll deal with that. It’s our job!
- Declare annual taxes in the UAE. Please let us know if you’re also eligible to play in your home country.
- Coordinate all holidays for each department
3.1-. Calculate and setup payrolls for each individual.
First of all, we’d have to calculate the total hours that each employee has worked over a month. These hours could be divided into two categories, as it normally occurs in HR.
- Regular weekday hours
- Friday hours, which regularly applies to days off (weekends)
Let us do all the work for your company. It is sometimes tedious to do these recorders when dealing with large companies in the UAE.
3.2-. Comply with taxes’ liability,
Expats, whether Americans, British, or Canadians, represent one of the biggest communities in Dubai. Most of them count on PEO & Payroll solutions in the United Arab Emirates, UAE.
You have to take into account that despite there being not federal tax in the UAE, petroleum and finance are taxable. In addition, most of the expatriates do have to comply with their home-countries taxation processes.
Please take note that foreign investors must have a partner in the United Arab Emirates. Why don’t you count with Connect Resources for that?
3.3-. Ask for any reimbursement to the city council in Dubai or Abu Dhabi.
To make things faster, there is an online process that you could follow in order to ask for reimbursements.
If you were treated in any private walk-in clinic or hospital, you may redeem a reimbursement when leaving the country for good.
Our opinion about PEO & Payroll solutions in the United Arab Emirates UAE.
Working with a third-party company that deals with all payroll and human resources in the UAE might be the smartest way to start a business in the Mideast.
Our solutions may help you both expand your organization and employ different representatives to explore the national market. Connect Resources services will also make your company skip the hassle of starting up a legal entity in Dubai or Abu Dhabi, among other cities in the country.
Why don’t you contact us to use the most efficient tools available in the market? Are you interested in hiring someone for a specific job position? For instance, we collaborate with local IT workforces and, Don’t hesitate to contact us for PEO vs. EOR solutions. We will turn into your local work permit sponsor. Connect Resources will also offer you the opportunity to receive a business visa issuance required for ex-pats and migrants interested in the UAE.
Receive a free quote now at +971 433 166 88 or contact us via email contact@connectresources.ae. Visit our profiles on Instagram or Facebook.
