Questions & Answers
Can my employer deduct private garage repair costs from my salary after an accident?
Dear Lawyers,
I had an accident last night, and it was my mistake. I called Saeed and made an insurance claim report, but my employer didn’t claim the insurance; he went to a private garage for repairs.
Now he has deducted the garage costs from my salary. Is this legal in the UAE?
Greetings,
The employer may not charge the worker maintenance expenses resulting from a traffic accident, as the car is insured according to the laws of the state, and it is not permissible to drive it without insurance.
If you are the cause of the accident or the victim of the accident, the responsibility for repairing the car falls on the insurance company.
However, if you do not have a driver's license and caused the accident, which voids the insurance, the burden falls on you to compensate for the loss you caused and expose yourself to legal accountability by the police because you violated the traffic law by driving without a driver's license.
We are honored to provide you with legal support. For further inquiries about your topic, you can come to our office or contact us via phone, WhatsApp, or email at [----------].
Dear Questioner,
According to the UAE Labor Law, the employer may deduct amounts from the employee's salary in specific cases, including:
- Recovering loans granted to the worker, subject to the worker's written consent and without any interest.
- Amounts due in accordance with the provisions of the law.
- Social insurance contributions and other contributions due to the worker.
- The worker's contributions to the savings fund or loans due to the fund.
- Installments for any social project or any other benefits or services provided by the employer and approved by the worker.
- Fines imposed on the worker due to violations committed.
- Any debts owed to the employer due to damage, loss or destruction of tools, machines or products owned by the employer, provided that the amounts deducted do not exceed five days' wages per month.
- Repayment of loans granted by the Housing Fund.
- Any other amounts due to the employer, subject to the worker's written consent.
If there are multiple reasons for deduction or withholding from the wage, the percentage of deduction and withholding may not exceed 50% of the wage in any case.
Dear Questioner,
While it may seem unfair that your employer is deducting the garage costs from your salary, the legality of this action depends on several factors such as your company might have specific policies regarding accidents and the handling of insurance claims.
If your company policy allows for such deductions, then your employer might be within their rights to deduct the costs.
However, it's important to review your employment contract and company policy to understand your rights and obligations.
If nothing is mentioned, then it's not legal to deduct it from your salary.
Dear Questioner,
I'm sorry to hear about your recent accident and the subsequent salary deduction!
Under the UAE Labour Law, employers are permitted to deduct amounts from an employee's salary in specific circumstances.
Article 25 of Federal Decree-Law No. 33 of 2021 outlines these situations, including deductions for repairing damage caused by the employee due to their error or violation of employer's instructions.
However, such deductions are capped at five days' wages per month, unless approved by the competent court.
In your case, since the employer opted for a private garage instead of using the insurance, the legality of the deduction depends on whether this choice was reasonable and in line with company policies.
If the repair costs exceed the five-day wage limit, the employer would need court approval for the additional deduction.
To ensure your rights are protected, I recommend reviewing your employment contract and discussing the matter with your employer.
If you believe the deduction is unjust or exceeds legal limits, consulting with a legal professional can provide clarity and guidance.
Feel free to reach out to me via WhatsApp or phone at [----------], or email me at [---------] to discuss this further.
It is possible that the insurance is not comprehensive. If you caused the accident and the insurance does not cover it, you need to check first.
In this case, he is entitled to receive the costs. If there is a problem, file a complaint with MOHRE.
Hello,
1. Understanding Salary Deductions in the UAE:
In the United Arab Emirates (UAE), employment and labor laws are governed by Federal Decree-Law No. 33 of 2021 on the Regulation of Labour Relations, commonly referred to as the UAE Labour Law.
This law outlines various rights and obligations for both employers and employees, including conditions under which salary deductions can be made.
2. Legal Framework for Salary Deductions:
According to the UAE Labour Law, employers are generally not permitted to make arbitrary deductions from an employee’s salary. However, there are specific circumstances under which deductions are allowed:
- Advance Payments or Loans:
Employers can deduct amounts related to advances or loans given to employees, provided these do not exceed 10% of the employee’s periodic wage.
- Social Security Contributions:
Deductions for social security contributions or other legally mandated payments are permissible.
- Fines or Penalties:
If an employee has caused damage due to negligence or intentional misconduct, the employer may impose fines or penalties as stipulated in the employment contract or company policy, but these must comply with legal limits.
- Court Orders:
Deductions mandated by court orders for debts owed by the employee can also be enforced.
- Insurance Premiums:
If agreed upon in writing, deductions for insurance premiums that benefit the employee may be made.
- Compensation for Damages:
Employers may seek compensation from employees who cause damage due to gross negligence or intentional acts; however, this typically requires a formal process and proof of fault.
3. Application to Your Situation:
In your case, since you admitted fault in causing an accident that resulted in vehicle damage, your employer might argue that they have a right to recover repair costs from you. However, several factors need consideration:
- Employment Contract and Company Policy:
Check if your employment contract or company policy explicitly mentions liability for damages caused by accidents and any procedures related to such incidents.
- Proof of Negligence:
The employer must demonstrate that you were grossly negligent or intentionally caused damage. Simple mistakes without gross negligence typically do not justify salary deductions unless specified otherwise in your contract.
- Formal Process Requirement:
Any deduction should follow a formal process where you are informed about the deduction’s reason and amount beforehand.
- Legal Limits on Deductions:
Even if justified, any deduction should not exceed legal limits (typically a percentage of your monthly wage).
If your employer deducted garage costs without following proper legal procedures or exceeding permissible limits, it could be considered illegal under UAE law.
4. Steps You Can Take:
- Review Employment Documents:
Examine your employment contract and any relevant company policies regarding liability for damages.
- Consult Legal Advice:
Consider seeking advice from a legal professional specializing in UAE labor law to assess whether the deduction was lawful.
- Contact Ministry of Human Resources and Emiratisation (MOHRE):
If you believe the deduction was unjustified, you can file a complaint with MOHRE for further investigation and resolution.
By understanding these aspects of UAE labor law concerning salary deductions, you can better navigate your situation and determine whether your employer’s actions were within legal bounds.
