UAE Labor Law 2025: Complete Employment Law Guide

The UAE Labour Law provides the legal foundation for employment relationships in the private sector. Understanding its structure is essential for compliance.

Key Legislation

• Federal Decree-Law No. 33 of 2021: Primary employment law
• Federal Decree-Law No. 9 of 2024: Enhanced penalties and protections
• Ministerial Resolutions: Detailed implementing regulations

Scope of Application

The law applies to all private sector employers and employees in the UAE mainland. It does not apply to:

• Free zone entities (DIFC, ADGM have separate laws)
• Domestic workers (governed by Federal Decree-Law No. 9 of 2022)
• Federal and local government employees

Under the 2024 amendments, unlimited-term employment contracts have been abolished. All employment contracts must now be fixed-term only.

Contract Requirements

• Fixed-term only: Maximum duration of 3 years
• Renewable: For similar or shorter periods
• Written form: Must be in writing
• MOHRE registration: Must be registered with Ministry

Mandatory Contract Contents

1. Employer's name and address
2. Employee's name, nationality, and ID details
3. Date of commencement
4. Job title and description
5. Place of work
6. Working hours
7. Wage and payment method
8. Annual leave entitlement
9. Notice period
10. End date (for fixed-term)

The 2021 law introduced flexible work arrangements to modernize employment in the UAE.

Standard Hours

• Maximum: 8 hours per day or 48 hours per week
• Ramadan: Reduced by 2 hours daily for all employees
• Rest break: Minimum 1 hour after 5 consecutive hours (not counted in working hours)
• Weekly rest: Minimum 1 day per week (typically Friday)

Industries with Exceptions

Hotels, cafes, security, and other continuous operations may have different arrangements but total hours must not exceed 56 hours per week.

Overtime Rules

• Overtime must be compensated at 125% of basic wage (normal hours)
• 150% for work between 10 PM and 4 AM
• Maximum overtime: 2 hours per day

Payment Requirements

• Wages must be paid through the Wage Protection System (WPS)
• Payment frequency: As per contract (typically monthly)
• Currency: AED or other currency if agreed in writing
• Late payment: Employer is late if payment not made within 15 days of due date

Wage Deductions

Employers may only deduct from wages for:

1. Loan repayments (max 10% of wage)
2. Social insurance contributions
3. Fines for violations (max 5 days' wage per month)
4. Court-ordered payments
5. Contributions to savings/pension schemes

Maximum total deduction: 50% of wage

Annual Leave

Sick Leave

Maximum 90 days per year. Requires medical certificate.

Other Leave Types

Duration and Rules

• Maximum duration: 6 months
• Cannot be extended or repeated with same employer
• Must be specified in contract

Termination During Probation

Rights During Probation

• Entitled to all statutory rights except paid sick leave
• Gratuity eligibility starts after 1 year total service
• Non-compliance with notice may result in 1-year labor ban

Standard Notice Period

• Minimum: 30 calendar days
• Maximum: 90 days (as agreed in contract)
• Must be in writing
• Payment in lieu allowed if agreed by both parties

Termination Without Notice by Employer (Article 44)

Employer may terminate immediately if employee:

1. Assumes false identity or submits forged documents
2. Commits error causing substantial material loss
3. Violates workplace safety instructions despite written warning
4. Fails to perform basic duties despite written warning
5. Discloses confidential information
6. Is intoxicated or under influence of drugs at work
7. Assaults employer, manager, or colleagues
8. Is absent for more than 20 intermittent days or 7 consecutive days without valid reason

Resignation Without Notice by Employee (Article 45)

Employee may resign immediately if:

1. Employer fails to meet contractual obligations
2. Employer assaults or harasses employee
3. Workplace poses danger to employee's safety/health
4. Employer assigns fundamentally different work without consent
5. Wages unpaid for 60+ consecutive days

Eligibility

• Minimum 1 year of continuous service
• Applies to both termination and resignation

Calculation

Cap and Payment

• Maximum gratuity: 2 years' total salary
• Payment deadline: Within 14 days of contract termination

Forfeiture

Gratuity is forfeited if employee is dismissed under Article 44 (gross misconduct).

Key 2024 Amendment Highlights

1. Increased penalties: Fines now range from AED 100,000 to AED 1,000,000
2. Fictitious employment crackdown: New provisions targeting fake employment schemes
3. Extended claim period: 2 years instead of 1 year to file labor claims
4. MOHRE enforcement power: Ministry decisions now legally enforceable for claims under AED 50,000
5. Enhanced protections: Strengthened anti-discrimination and workplace safety provisions