Essential Insights into UAE Labor Law: Your Guide to Employment Rights

Explore the key aspects of UAE labor law and understand your employment rights. Stay informed and protect your workplace interests. Read more now!

Over the years, the United Arab Emirates has established itself as a talent haven. 

A thriving economy, diverse employment opportunities, higher salaries, and tax-free income make it a lucrative destination for professionals worldwide. In 2022, the comprehensive UAE labor law reforms further enhanced the Gulf country’s appeal. 

Overview of UAE Labor Law Reforms

Until 2022, the employee-employer relationship in the UAE was governed by the Federal Law No. 8 of 1980. However, the UAE government felt a need to reform its labor laws in 2021 due to a combination of economic, social and global factors. 

On 2^nd February 2022, the UAE’s new labor law, also known as the Federal Decree Law No. 33 of 2021, came into effect by replacing the previous Federal Law No.8 of 1980. The new law, supervised by the Ministry of Human Resources and Emiratisation (MoHRE), introduced several significant reforms aimed towards modernizing the employment practices including abolishing unlimited-term contracts, strengthening anti-discrimination provisions, and improving leave entitlement among other things. 

A further amendment to the Federal Decree Law No. 33 was passed on July 29, 2024, in the form of Federal Decree-Law No. 9 of 2024. This new labor law became effective from August 31, 2024, and introduced additional reforms like salary continuation during labor disputes, the introduction of probation period notice, strengthening the authority of MoHRE, and updating the existing Emiratisation laws – an initiative to boost the participation of Emirati nationals in the private sector.

The aim of this article is to help understand the essential detail of the reformed UAE labor laws and what they mean for you and your employer.

Zones Exempted From the New UAE Labor Law

The UAE Labor Law is applicable to all businesses, employees and employers in the private sector operating in the UAE and its free zones. However, the Dubai International Financial Centre (DIFC) and Abu Dhabi Global Market (ADGM), which have their own employment laws, are exempted.

Key Highlights From the New UAE Labor Laws

Employment Contracts in the UAE

An employment contract is a legal agreement that governs the relationship between an employer and an employee. It outlines the terms and conditions of employment and includes details like date of joining, designation, duration of employment, salary, conditions of termination, and, notice period. 

Here’s everything you need to know about employment contracts under the new labor law:

Types of Contracts

Fixed Term Contract

Fixed-term contract refers to contracts where the employee has been hired for a limited period of time. The term may be extended or renewed for a similar or shorter duration.

• The new labor law abolished unlimited term contracts and established fixed term contracts with clear start and end dates as the norm in the country. 
• If the contract is not renewed or extended upon its expiry, and the parties continue to perform the obligations of the contract, the contract is then considered renewed under the same terms and conditions as those of the original contract.
• Any extension or renewal of the terms of the employment contract will be added when calculating an employee’s end of services benefits.

Part-Time Contract

Part-time employment is now recognized as a distinct category under Article 8 of the Federal Decree Law No. 33 of 2021. This contract allows skilled workers to work for an employee for a specified number of hours or days with part-time work permits from MoHRE.

• Part-time employment is now formalized under the new labor law, ensuring compliance with regulatory requirements while offering flexibility to employers and employees.
• Part-time workers are entitled to annual leave on a pro-rata basis according to the actual working hours they spend with the employer. 
• Part-time workers are eligible for end-of-service benefits calculated on a pro-rata basis, reflecting their contracted working hours relative to full-time employees. However, temporary workers are exempt from end-of-service benefits if their employment duration is less than a year.

Unlimited Contract

The now-abolished unlimited contract was an open-ended contract system with no fixed start or end date. Generally viewed as more flexible and user-friendly than limited term contracts, unlimited was very commonly used across the UAE. 

• Under the new labor law, all unlimited contracts are to be converted into fixed term contracts within one year of the effective date of the existing contract. 
• In the interim, the provisions of the new decree-law shall apply to all unlimited employment contracts entered into in accordance with the Federal Law No.8 of 1980.

Probation Period Under the New Labor Law

The probation period is the initial phase of employment where the employee and the employer can assess each other for the suitability of a long-term commitment. Under the new UAE labor law:

• The probation period of an employee cannot exceed or be extended beyond six months.
• Employees who complete the probation period successfully will have this period included in their total service duration.
• The employer can terminate the services of an employee on probation by giving 14 days prior written notice.
• If an employee on probation wants to join another employer in the UAE, they must provide a written notice of a minimum of one month. The new employer has to compensate the current employer for the employee’s recruitment cost, unless otherwise agreed between the current employer and the employee.
• If the employee on probation resigns from his current position with the intention of leaving the UAE, they must provide a written notice of 14 days. However, if the employee returns to the UAE within three months of his departure on a new work permit, the new employer will be liable to compensate the previous employer for the employee’s recruitment costs, unless otherwise agreed between the current employer and the employee.

Different Types of Work Arrangements

Within the ambits of the fixed or part-time employment contract, employers and employees can enter into various types of work arrangements including:

Full-Time Employment

An employee on a full-time employment contract will typically work between 40 to 48 hours per week. They are entitled to receive comprehensive benefits, including health insurance, 30 days of paid leave, and full end-of-service benefits from their employers. 

Temporary Employment

Temporary contracts, unlike full-time fixed-term contracts, are often project-specific and for a much shorter duration, often ending with the project completion date. 

Freelancing

Freelancers can work with multiple employers without being tied to one contract. However, they should have clear contracts that comply with UAE labor law to ensure fair treatment and wage protection. A freelance contract should have clearly defined deliverables and payment terms. However, unlike full-time or part-time workers, freelancers will not be eligible for any employee benefits. 

Flexible Work

Flexible work offers the added flexibility of adjustable hours or tasks by mutual consent between the employer and the employee. A worker in a flexible working arrangement has full labor rights including wage protection, leaves, etc. pro-rated to the agreed terms.

Remote Work

Remote workers are allowed to work from any location outside the workspace. The new labor law requires employers to explicitly outline remote work arrangements, including the working conditions and expectations. 

Job Sharing

In a job-sharing arrangement, multiple employees can share the responsibilities of a single full-time role. This arrangement offers a work-life balance for the employee while the employer gets the necessary skills required to get the job done.

Employee Rights and Benefits Under the New UAE Labor Law

Leaves and Vacations

Leaves and vacations are vital for employees to destress and balance their professional and personal lives. The UAE labor law recognizes several different types of leaves that can help the employees rejuvenate.

Annual Leave

Employees have to complete a minimum of six months of service to be eligible for annual leave. An employee will receive 30 days of fully paid annual leave if they have completed one year of service. Employees who have completed six months but not a year are eligible for fully paid annual leaves calculated at 2 leaves per month.

Maternity Leave

A female worker is entitled to 60 days of maternity leave, of which 45 days are fully paid and the other 15 days are half-paid leaves. If the employee has an illness due to pregnancy and cannot resume work, she can take an additional 45 days leave without pay.

Parental Leave

Employees in the private sector are entitled to five days of paid parental leave. The parental leave can be availed anytime during the initial six months of childbirth.

Study Leave

Upon completion of a minimum of two years of service, an employee earns a ten-day study leave per year to sit in examinations. However, the employee must be enrolled in one of the UAE’s certified educational institutions to avail of this leave.

Sick/Rest Leave

Employees who have completed their probationary period are eligible for sick leaves not exceeding 90 days per year. These leaves can be taken continuously or intermittently. The first 15 days of sick leave are paid, the next 30 days are paid at half pay while any day beyond that is unpaid.

Compassionate Leave

Employees are entitled to a paid bereavement leave of 5 days in case of the death of the spouse, and 3 days in case of the death of a parent, child, sibling, grandchild or grandparent.

Hajj Leave

Employees can request up to 30 days of unpaid special leave to perform Hajj. However, this leave can be granted only once during the employment duration with the company.

Umrah Leave

Although there’s no provision for Umrah leave under the UAE labor law, employees can request Umrah leave. The employer has the discretion to approve the request, either deducting it from the employee’s paid annual leave or granting it as unpaid leave.

Rest Day

UAE labor law grants employees one paid rest day each week. It can be any specified day in the employment contract. Even if the employer is applying roster shifts, the employee must receive the legally required rest.

Public Holidays

The labor law mandates both the public and private sectors to offer their employees the day off on public holidays listed below:

• Gregorian New Year on 1^st January – 1 day
• Eid Al Fitr – 4 days
• Arafat Day and Eid Al Adah - 4 days
• Hijra or Islamic New Year - 1 day
• Prophet Mohammed’s birthday - 1 day
• National Day – 2 days

Minimum Wage Under the UAE Labor Law

As of 2025, there’s no defined minimum wage under the UAE labor law. However, the law requires the pay to be sufficient to meet an employee’s basic needs. 

Termination of Employment Under the UAE Labor Law

Termination of Employment Contract

Both employees and employers have the right to terminate an employment contract. They can do so by serving the prescribed notice period and complying with the law. 

Termination of an employment contract is governed by the following conditions outlined in Article 42 of the UAE labor law.

• The contract’s term expires and isn’t renewed or extended.
• The employee and the employer mutually agree to end the contract in writing.
• Either party can end the contract by giving the other the agreed notice.
• In a firm where the employment contract is linked to the employer’s entity, the employer’s death can end the contract.
• In the event of the employee’s death or debilitating disability, the contract will end upon the presentation of an appropriate medical certificate from competent authorities.
• If the employee faces a final court judgement of a freedom-restricting penalty for a period of not less than three months.
• The establishment is closed permanently by UAE legislation.
• If the employer becomes bankrupt or insolvent or faces any economic or exceptional reasons that prevent the continuation of the project.
• If the employee cannot fulfil the conditions required for renewing the work permit for any reason beyond the control of the employer.

Notice Period Under the New Labor Law

The minimum standard notice period, according to the new UAE labor law, is 30 days. For contracts exceeding 2 years, the notice period can extend to a maximum of 60-90 days.

However, the employee and employer may mutually decide and agree to shorten or extend the notice period, depending on their needs and requirements, provided the agreement is well-documented in the employment contract. 

The notice period duration can vary depending on the type of contract. Let’s take a detailed and closer look into these.

Notice Period for Employees on Probation

• The employer can terminate the services of an employee on probation by giving 14 days prior written notice.
• If an employee on probation wants to join another employer in the UAE, they must provide a written notice of a minimum of one month. The new employer has to compensate the current employer for the employee’s recruitment cost unless it is otherwise agreed between the current employer and the employee.
• If the employee on probation resigns from his current position with the intention of leaving the UAE, they must provide a written notice of 14 days. However, if the employee returns to the UAE within three months of his departure on a new work permit, the new employer will be liable to compensate the previous employer for the employee’s recruitment costs, unless otherwise agreed between the current employer and the employee.

Notice Period for Employees on Limited Contract in UAE

• Unless otherwise stated in the contract, an employee must serve at least 30 days’ notice before the limited contract expires.
• The maximum notice period for an employee on a limited contract cannot exceed 90 days (3 months). 
• In case either parties (employees and employers) decide to terminate the contract without proper notice or valid reason, the non-compliant party needs to compensate with a penalty equivalent to 3 months’ salary or the remaining contract duration.

Notice Period for Unlimited Contracts in UAE

• The notice period for unlimited contracts is 30 days. However, it may vary or extend if the employer requires it and if mutually agreed upon by both parties. 
• Asking employees to work beyond the 30-day notice period, especially without their agreement, is a breach of the contract and a law violation.

Employer Obligations During a Notice Period

The employer in the UAE is bound by specific responsibilities and obligations when it comes to an employee’s notice period. Here are the obligations an employer must fulfil to ensure compliance and a smooth transition.

• The employer must continue paying full salaries to the employees, including allowances during the notice period.
• The employer must take care of the final settlement of dues and all outstanding payments. 
• Pending payments due for the days worked by an employee must be paid by the employer. This also includes unused annual leave balance, end-of-service gratuity, pending bonuses, and unpaid overtime hours.
• Once the notice period ends, or a few days before it does, employer must issue all the necessary documents, including a release or experience letter, an end-of-service letter, a No Objection Certificate (NOC), and a reference letter, which is not mandatory, to the employee.
• If applicable, the employer is obligated to conduct and initiate the work permit and visa cancellation process once an employee’s notice period ends. The cancellation process should meet the UAE immigration and UAE labor law requirements to avoid legal repercussions and penalties.
• The employer is strictly prohibited from retaliatory actions, such as mistreating or penalizing employees by withholding salaries, adding additional workloads, and creating a hostile work environment.
• The employer must ensure compliance with contractual and legal obligations and prohibit acts like reducing the notice period or terminating an employee before the end of the notice period without a just and valid reason.

Employee Responsibilities During a Notice Period

Not just the employer but employee too need to adhere to certain laws and moral obligations when serving a notice period in UAE. Here’s more detail about the same:

• The employee is expected to continue performing their tasks and duties with full dedication and professionalism, as before submitting their resignations. He/she must complete all pending tasks or hand them over to their designated replacement within the stipulated time. 
• The employee must transfer and hand over all his/her knowledge and data regarding any ongoing projects to their replacement or colleague and willingly participate in handover training sessions and meetings. 
• The employee must serve their full notice period unless both the employee and the employer mutually agree upon shortening it. Deliberately leaving the company without completing the notice period can lead to legal actions and financial compensation owed to the employer. 
• The employee is expected to be punctual with 100% attendance during the notice period and have a professional attitude to avoid conflicts and disruptions. 
• The employee is legally obligated to protect and safeguard the company’s confidential information even when serving a notice period. 
• The employee must return the current company’s issued properties, like laptops, mobile phones, keys, and ID cards before his/her notice period ends. 

Understanding Payment Terms During Notice Period In UAE

An employee’s payment terms during the notice period in the UAE depend on the specific terms mentioned in the employment contract and UAE labor law.

• Employees are entitled to receive a full salary when serving their notice period, provided they actively work during this time. This salary includes the basic salary and the allowances. 
• If the employer decides to waive the notice period for reasons like finding a replacement or having minimal to no workload, they must compensate the employee with the full salary equivalent to the notice period. 
• If the employee decides to waive the notice period, the employer does not need to pay the employee's salary unless agreed otherwise. 
• After the employee completes their notice period, the employer is required to provide the full and final settlement to the employee, which includes unpaid salary, leave encashment, and gratuity pay.

To know more about notice periods in detail under the UAE labor law, read our updated definitive guide.

Arbitrary Dismissal in UAE

Arbitrary dismissal in the UAE refers to the act when an employer terminates an employee unfairly without a valid reason, outlined under Article 47 of the Federal Decree-Law no. 33. 

• This law protects employee rights and ensures they receive fair treatment from their employers. 
• In case of arbitrary dismissal, where employees believe they have been dismissed illegally without cause, they can file a complaint to the Ministry of Human Resources and Emiratisation (MoHRE), which will resolve the issue. 
• In case the arbitrary dismissal is proven, employees are entitled to the 3 months’ equivalent salary from their employer, including allowances and other dues payments. 

Disciplinary Suspension Under UAE Labor Law

Article 40 of the UAE Labor Law empowers the employer to temporarily suspend an employee in the following cases:

Suspension for Serious Crimes

• If the employee has been accused of committing a serious crime against life, property, honor or honesty, or of carrying out a strike, they may be suspended from work temporarily.
• The suspension will begin after the notification of the incident to the competent authorities and will be in effect until a decision is issued.
• The employee will not be entitled to his/her wages during the suspension period. However, if he/she has been cleared of the accusation of the crime, or if it is decided to not prosecute him/her, he/she shall be reinstated and be paid full wages for the suspension period.

Suspension for Disciplinary Investigation

• If the employer wants to conduct a disciplinary investigation, they may suspend the employee for a maximum of 30 days.
• During the suspension period, the employee shall be entitled to half his/her wage.
• If the employer fails to establish a case, the employee will be entitled to his/her wage in full for the suspension period.

Guidelines for Implementing Disciplinary Measures

Employers must observe the following rules for imposing disciplinary sanctions on the employees:

• The disciplinary action must correspond with the gravity and seriousness of the violation committed.
• The employer must establish a clear schedule outlining each disciplinary action and its corresponding penalty.
• The employer may impose sanctions only after conducting a thorough investigation and providing the employee with an opportunity to be heard.
• The employer may not punish an employee more than 30 days after discovering the offense. Additionally, no disciplinary sanction can be imposed more than 60 days after completing the investigation into the offense for which the employee is found guilty.
• The employee can file a grievance with the concerned department within his/her company against the penalty imposed on him/her and must be notified of its outcome by the employer.

Salary Continuation During Disputes

In the event of dispute between the employee and the employer, if the employee continues to work throughout the hearing of the labor dispute before the court, the Ministry may require the employer to pay two months’ wages to the employee or refer the complaint in this regard to the court.

Termination Of Employment Contract Without Notice

Under Article 44 of the New UAE Labor Law, an employment contract can be terminated without prior notice if it meets any of the criteria below:

• The employee has submitted forged documents, or certificates or adopted a false identity.
• The employee has committed an error that has resulted in material loss to the employer or has deliberately caused harm to the employer’s property. This must be admitted by the employee and the employer must notify the MoHRE of the incident within seven working days after being aware of its occurrence.
• The employee has violated the rules and regulations of the establishment relating to work or safety measures despite being aware of such rules.
• The employee cannot perform his/her basic duties specified in the employment contract and persists in violating the contract despite two warnings.
• The employee divulges any secrets of the employer resulting in losses or a missed opportunity, or achieving a personal benefit for self.
• The employee has been found drunk or under the influence of prohibited drugs during working hours or commits an action breaching the public morals at the workplace.
• Has assaulted his employer, manager or colleague during his employment.
• Has been absent from his workplace without lawful excuse for over 20 intermittent days or more than seven successive days in a year.
• The employee has exploited his official position illegally to obtain personal results and gains.
• The employee has joined another establishment without complying with the rules and procedures set out in this regard.

Workplace Safety and Health Regulations

Under clause 13 of Article 13 of the Federal Decree Law No. 33 of 2021, the employer is obliged to provide a safe and appropriate work environment to the employees. Both the employer and employees must comply with all the controls and procedures issues by the Ministry of Human Resources and Emiratisation (MoHRE) and other competent authorities of the UAE regarding occupational health and safety.

Prevention of Injuries and Occupational Hazards

In this section, you’ll learn about the obligation of the employer and the employee towards preventing injuries and occupational hazards.

Employer’s Obligations

• The employer must provide the necessary means of protecting workers from the hazards of occupational injuries and diseases that may occur during work.
• The employer must place instructional boards with awareness materials.
• The employer must provide appropriate training to workers to avoid such risks
• The employer must conduct periodic evaluations to ensure that all parties to the employment contract, comply with and meet the requirements of occupational health and safety.

Employee’s Obligations

• The employee must use the protective equipment and clothing provided to him.
• The employee must comply with all instructions given by the employer to protect him from danger.
• The employee must refrain from acting against the employer’s health and safety instructions.
• The employee must follow the employer’s orders and instructions relating to occupational health and safety.
• The employee must undertake to protect what is in his possession.
• The employee must refrain from committing any act which violates the aforementioned instructions or poses harm to the health and safety of all.

Mid-Day Break During the Summer Months

No construction or industrial worker is permitted to work between the peak hours of 12.30 pm and 3 pm from 15 June to 15 September each year. However, some workers may be exempted from this rule due to the technicality of their jobs.

How To Report Work Injuries and Occupational Diseases

The UAE government has established several channels for reporting occupational injuries and diseases to the MoHRE. Here’s a list:

• Through MoHRE’s digital services portal.
• Through business service centres, approved by MoHRE.
• Through MoHRE’s app on the App Store and Google Play.
• Any other channel specified by MoHRE.

In case of an injury or death at workplace, the employer/s must inform MoHRE within 48 hours from the incident.

Health Insurance in UAE Labor Law

Starting 1^st January 2025, employers must purchase a basic health insurance package for all employees. Failure to comply can attract heavy fines under the new labor law.

Overtime Regulations Under the UAE Labor Law

• Under Article 17 of the Federal Decree Law No. 33 of 2021, the standard working hours of an employee in the UAE is capped at 8 hours per day or 48 hours per week. 
• However, employees working in trade, hotels, and cafeteria security may work 9 hours per day.
• Employees working more than the stipulated hours will be entitled to overtime pay for the extra hours.
• Under UAE Labor Law, overtime is calculated as the basic hourly wage plus at least 25% extra for daytime, 50% for nights, or 150% for holidays/rest days, capped at 2 hours daily.

Salary (Wage) Payment Under the UAE Labor Law

The UAE government has introduced the Wages Protection System – an electronic salary transfer system to ensure that the employees receive their salaries on time.

• All employers registered with the Ministry of Human Resources and Emiratisation (MoHRE) must subscribe to the ‘Wages Protection System’ (WPS).
• All salaries must be paid through the Wages Protection System on the due dates.
• Under WPS, the salaries of employees will be transferred to their accounts in banks or financial institutions, which are authorized by the Central Bank of the UAE to provide the service.
• Salary can be in Emirati Dirham or any other currency if it is agreed upon between both parties in the employment contract.
• Electronic monitoring will be performed on establishments to ensure compliance with the payment of wages.
• Penalties for non-compliance can range from work permit restrictions to hefty fines and even closure. 

Anti-Discrimination Laws Under the New UAE Labor Law

• The new UAE labor law prohibits forced labor and discrimination based on gender, race, color, sex, religion, national or social origin or disability. 
• It also prohibits harassment, bullying, physical violence and psychological abuse against employees. 
• The employer’s failure to comply with the provisions of the labor law can attract hefty fines to the tune of AED 1,000,000.

Frequently Asked Questions about UAE Labor

1. What if my employment contract is terminated without a due process?

   If you believe that you have been dismissed arbitrarily and without cause, you have the right to file a complaint with the Ministry of Human Resources and Emiratisation (MoHRE). If the arbitrary dismissal is proven, you will be entitled to the 3-months’ equivalent salary from your employer, including allowances and other dues payments. 

2. Is a 9-hour work day legal in UAE?

   Under the new UAE labor law, the standard working hours of an employee is capped at 8 hours per day or 48 hours per week. However, if you are employed in trade, hotels, and cafeteria security, you may be required to work 9 hours per day.

3. What is the law for resignation under the UAE labor law?

   Under the new labor law, you can terminate your employment contract with your employer by serving the notice periods outlined in your contract.

   • Employees on probation who want to join another employer in the UAE must provide a written notice of a minimum of one month. Your new employer has to compensate the current employer for the employee’s recruitment cost unless it is otherwise agreed between the current employer and the employee.
   • Employees on probation who resign with the intention of leaving the UAE must provide a written notice of 14 days. 
   • Employees who have finished their probation and are on limited contract must serve at least a notice period of a minimum of 30 days extending to a maximum of 90 days.
   • In case either parties (employees and employers) decide to terminate the contract without proper notice or valid reason, the non-compliant party needs to compensate with a penalty equivalent to 3 months’ salary or the remaining contract duration.
   • The notice period for unlimited contracts is 30 days. However, it may vary or extend if the employer requires it and if mutually agreed upon by both parties. 

4. Do I need to pay if I resign under probation period?

   If you are resigning under probation to join another employer within the UAE, you have to serve a minimum of one month’s notice. In addition, your new employer has to compensate the current employer for the employee’s recruitment cost, unless otherwise agreed between your current employer and yourself.

   If you are resigning with the intention of leaving the UAE, you have to serve a written notice of 14 days. However, should you return to the UAE within three months of departure, your new employer will be liable to compensate the previous employer for the employee’s recruitment costs, unless otherwise agreed between your current employer and yourself.

5. What is the basic salary as per UAE labor law?

   As of 2025, there’s no defined minimum wage under the UAE labor law. However, the law requires the pay to be sufficient to meet an employee’s basic needs. 

Conclusion

The Emirates is home to a 6.79 million strong work force. Skilled workers, especially from the technology, banking and finance domain, make up a significant chunk of this demographic. 

These are workers who seek flexibility, work-life balance, career growth, recognition and an inclusive workplace culture. The labor law reforms with its balanced and inclusive framework are a step towards addressing these concerns comprehensively. 

For employees, staying updated on these reforms will empower them to build a bright and promising career in one of the world’s most happening economies.

For employers, the reformed UAE labor law will help create the competitive edge to attract and retain the best talent. But they also have the added responsibility to ensure compliance at the earliest. 

Darwinbox can help employers with this transformation by making it seamless. To know how sign up for a demo.