Business owners in UAE have to cater to the housing needs of their employees since the majority of their workforce comes from abroad. For this purpose, they have two options: staff accommodation and accommodation allowance. Staff accommodation is a facility where employers keep their workers. On the other hand, an accommodation allowance is an incentive provided to workers with their monthly wages. But which is a better option? In this blog, we are going to discover what is better: Providing staff accommodation vs accommodation allowance?
What Is Accommodation Allowance?
This is a common question among workers in the UAE: Do you get an accommodation allowance? Accommodation allowances are not included in the base salary and must be negotiated individually. The UAE Labor Law distinguishes between the terms “basic wage” and “total wage.” The former is an employee’s compensation excluding all allowances of any kind and is specified in the labor contract as such, whereas the latter is an employee’s wage inclusive of all allowances offered, such as housing and travel allowances, and is specified in the labor contract as such. As a result, according to UAE labor law, allowances such as flights, accommodation, transportation, and telephone must be agreed upon separately from the base wage. Accommodation allowance can be given in one of two ways: cash/cheque in advance or the company agreeing to secure housing on the employee’s behalf. The accommodation allowance is not subject to any specific criteria or set values under UAE labor law. The employer and the employee determine and agree on such figures.
What Is Staff Accommodation?
A diverse range of businesses operates in UAE, from the hotel and real estate businesses to construction and information technology. The majority of these companies’ workers are overseas laborers who demand safe and secure accommodation. Aside from accommodation allowances, several corporations choose to move their employees to designated staff and labor buildings. A labor camp is a place where business owners house their employees. Employees benefit from these labor accommodations in a variety of ways. Workers’ accommodations provide a variety of amenities, ranging from bedrooms and dining rooms to prayer rooms and gyms. Furthermore, the UAE Labor Law has established a set of guidelines for employers who wish to give housing to their employees. When it comes to employee accommodation, all businesses must adhere to this set of guidelines. Businesses with more than 50 employees and a monthly salary of less than AED 2000 must offer accommodation for their workforce, according to Ministerial Resolution No. 591 of 2016. Accommodations that are well-lit, air-conditioned, as well as ventilated are necessary. The ministry’s guidelines cover bedrooms, bathrooms, kitchens, and dining rooms. There should also be a healthcare service area, a prayer room, and a laundry room.
Staff Accommodation VS Accommodation Allowance: Which One Is Better For Businesses?
As there are two options for business owners to cater to the housing needs of their employees, the question is which option is better? Providing staff accommodation vs accommodation allowance: which is a better choice for businesses in UAE? If we thoroughly examine the pros and cons of these two options, we can easily discover the better choice for business owners. For instance, companies want an affordable option and it has been experienced that providing staff accommodation is cheaper than providing accommodation allowance. It is also better since companies can reside their staff near to their place of work. Providing staff accommodation is also a convenient option since companies can outsource this task to professional staff accommodation companies. It makes it easy for business owners, and through this, they can shift their focus on their business dealings. It is also a better option for the employees of these companies since professional staff accommodation companies provide state-of-the-art workers accommodations and labor camps. So, it is a win-win situation for both business owners and their employees.
As we have taken a thorough look into providing staff accommodation and accommodation allowance, we can conclude that staff accommodation is a convenient and affordable option for business owners. Moreover, it would be best for business owners if they outsource the task of providing staff accommodation to professional companies.
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