My company is cutting salaries for health insurance reasons. Is that right? Are they allowed to do this? Is it the employer or employee that bears the cost of the insurance? EG, Dubai
An employer is not permitted to arbitrarily reduce an employee’s salary or make any other changes to their contract of employment. This can only be done with the employee’s agreement. If anyone’s employer does this then the employee has the right to register a complaint, either with their local labour office or with the Ministry of Human Resources and Emiratisation (formerly the Ministry of Labour) and the helpline number is 800 665.
Under the rules set out by the Dubai Health Authority (DHA) the responsibility for both arranging and paying for compliant medical insurance is the responsibility of the employer, without exception. The employer may be trying to reduce staff salaries to Dh4,000 a month so that they can use the Essential Benefit Plan, a basic but cheap policy offered by nine approved providers. This is designed to provide a minimum level of cover to lower paid employees but has restriction in terms of eligibility. It is not right for a company to reduce salaries simply to reduce their overheads. The deadlines for companies to have set up DHA-compliant cover have long passed and any employer who has not properly complied will be fined. If the company is trying to pass on costs to employees, they should be reported to the DHA via regulation@dha.gov.ae.
Keren Bobker is an independent financial adviser and senior partner with Holborn Assets in Dubai, with over 20 years’ experience. Contact her at keren@holbornassets.com. Follow her on Twitter at @FinancialUAE.
The advice provided in our columns does not constitute legal advice and is provided for information only.
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