"Comission-based Income: Surviving Economic Uncertainties Among UAE Residents Without Fixed Wages"
Commission-Only Employment in the UAE: Financial Uncertainty and Legal Protections
In the United Arab Emirates (UAE), commission-only employment is a common practice in industries such as real estate, retail, and recruitment. However, this form of payment structure often leaves workers navigating financial uncertainty and unclear legal protections.
According to the Federal Decree-Law No. 33 of 2021, commission-based pay is legal in the UAE as long as it is mutually agreed upon and formally documented in the employee's registered contract with the Ministry of Human Resources and Emiratisation (MOHRE). This law provides a legal framework for commission-only contracts, making such arrangements lawful in the UAE.
However, several common challenges persist for workers under these contracts. One of the primary issues is the lack of a fixed or guaranteed base salary. Workers earn income only based on sales made; if there are no sales, they receive no pay, leading to financial instability. Additionally, the UAE law does not set a numerical minimum wage, only broadly stating that pay must meet the basic needs of the worker. This leaves room for interpretation and potential exploitation.
Moreover, earnings vary dramatically with sales performance and seasonal demand, causing hardship during slow periods. Employers may also delay commission payments or reduce pay post hoc due to returns or complaints, adding financial unpredictability. Mental and financial stress is a common issue for employees on commission-only contracts, as they often live paycheck-to-paycheck and are dependent on unpredictable sales.
Commission-based employees in the UAE do not receive hourly wages, overtime, or a guaranteed base pay. This lack of additional benefits can further exacerbate financial instability. Noura, a former real estate agent, experienced delayed payments and non-payment under a commission-only setup, highlighting the risks associated with this type of employment.
Despite these challenges, some employees, like Aisha M, a 29-year-old real estate broker in Dubai, continue to work under commission-only contracts due to the potential high earnings. During low seasons, commission-based employees in the UAE may earn as little as Dh500. Tariq Mahmoud, who works in electronics retail, has a commission-only contract and can go home with no pay if he doesn't make a sale.
Noura, who now works in banking sales, warns that commission-only roles can be risky and advises potential employees to thoroughly research the company before accepting such a job. She stresses the importance of asking colleagues about payment practices and potential delays in a commission-only job. If Aisha sells a property in the last 10 days of a month, she might not receive her commission until the following month, depending on her employer's internal processes.
In conclusion, while commission-only contracts are legally recognized in the UAE if formally registered and agreed upon, residents working under them face significant financial uncertainty, lack of minimum wage safeguards, and payment delay risks. These challenges underscore the importance for workers to carefully review contract terms and employer reliability before entering into commission-only employment.
- In industries like sports and business, commission-only employment, similar to real estate and retail, is not uncommon.
- News outlets often report on the financial struggles faced by commission-based workers, particularly in the fields of real estate and personal-finance.
- Financial institutions, including banks and insurance companies, offer commission-based positions in their business operations.
- The high earnings potential in some commission-only jobs, such as sales in sports or finance, can attract employees looking for significant remuneration, despite the associated risks and unpredictable income.
