The employer and employee must enter into a fresh employment contract signed by both parties.
If the employer wants to reduce the salary, they should enter into a fresh employment contract signed by both parties and it needs to be submitted to the Ministry of Human Resources and Emiratisation for approval.
Article 60 of the Federal Law No. 8 of 1980 regulating employment relations in the UAE (the ‘Employment Law’) states, “No amount of money may be deducted from an employee’s remuneration in respect of private claims, except in the following cases:
(a) the recovery of advances or amount of money paid to the employee in excess of his entitlements, on condition that the amount deducted in this case does not exceed 10 per cent of his periodic remuneration;
(b) Contributions which the law requires the employee to pay from his remuneration, e.g. towards social security, insurance schemes;
(c) The employee’s contributions to a savings fund or repayment of advances repayable;
(d) Contributions towards any welfare scheme or in respect of any other privileges or services provided by the employer and approved by the Ministry;
(e) Fines imposed upon the employee for any offence made;
(f) Any debt payable in execution of the judgment of a court;
Provided the deduction shall not exceed one-quarter of the employee’s remuneration. Where two or more debts are payable, the maximum shall be half the employee’s remuneration and the sums of money attached shall be divided pro rata among the beneficiaries, after payment of any legal alimony at the rate of one-quarter of the employee’s remuneration.”
Know the law
To reduce salary, the employer and employee must enter into a fresh employment contract signed by both parties and it needs to be submitted to the Ministry of Human Resources and Emiratisation for approval.