Bonuses in the United Arab Emirates

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Employers often use bonus schemes as incentives to reward and retain valuable employees and this is usually the time of year when employers are reviewing performance and determining whether bonuses will be issued. The criteria on which performance is measured, and against which bonuses are ultimately quantified, vary across companies and market sectors and, although bonus schemes are common, there are no statutory restrictions or guidelines dealing with the payment of bonuses in the UAE.

Employment relationships in the United Arab Emirates are generally regulated by the UAE Federal Law No. 8 of 1980 (as amended) (the Labour Law) together with regulations promulgated under that law. The Labour Law applies to all employees working in the UAE, with a small number of exceptions. One of those exceptions relates to employees working in the Dubai International Financial Centre (DIFC) who are subject to  the DIFC Employment Law No. 4 of 2005.

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