UAE Labour Law Explained: What It Means for Employees and Businesses (2025)
Published Date:
May 21, 2025
Navigating the workplace can be complex, but at the heart of every successful business lies a strong and fair relationship between employer and employee. This relationship not only shapes the culture and productivity of an organization but is also regulated by laws designed to protect both parties. Labour laws play a crucial role in ensuring workplaces around the world operate ethically and efficiently, and the United Arab Emirates is no exception.
The UAE Labour Law, formally known as Federal Law No. 8 on the Regulation of Labour Relations, outlines the rights and responsibilities of employers and employees. Supported by various ministerial decrees and resolutions, this legal framework serves as a guide for paying salaries, types of employment contracts, leave entitlements, conflict resolution, and termination.
This blog simplifies the concepts of the UAE labour law, so employers and employees can better understand its implications for them.
Employment Contracts
Employment contracts are a formal agreement between the employer and employee that defines the legal boundaries during the period of work. The scope and conditions of an employment contract in the UAE depend on whether you are employed in the private or public sector.
Private-Sector Employment Contracts
Amendments to the UAE employment law have made fixed-term contracts widely recognised as the standard in the private sector as of February 2, 2025. Employers who still use the old, unlimited contracts must now switch to renewable fixed-term contracts.
The recent updates to the law state that employees hired for a fixed term cannot be bound to contracts longer than three years. However, their employment contracts can be extended or renewed for a similar or shorter period. If a contract expires and both the employee and employer continue working as usual, the contract is automatically considered renewed under the same terms.
Public Sector Employment Contracts
The contracts available for employees serving the public sector are as follows:
Full-time contracts: Generally, eight working hours across five days
Part-time contracts: Employees who work less than 40 hours a week
Temporary contracts: Full working days or hours until a project is completed (e.g. 3-month contracts), which can be renewed at similar periods.
Special contracts: This is a type of employment in the public sector where a minister or higher official appoints an individual to a special position within the organisation or government entity. The contract is valid for two years and can be renewed for another two years, depending on the demands of the job role.
Types of Work Arrangements
There are many different types of work arrangements available for both employees and employers. Some of them are:
Full-time: The employee works for a single employer on a full-time basis only.
Part-time: Allows you to work for one or more employers for specific hours or days.
Temporary: The working period depends on a particular assignment, project, or task. The contract ends upon completion.
Flexible: The working hours or days can change depending on the task or the employer’s needs.
Remote: A work arrangement that does not involve reporting to a physical office.
Job sharing: Tasks, responsibilities, and goals of a job role are divided among team members as agreed. The rules of part-time work apply to these contracts.
Probation Period in the Private Sector
As per the UAE Labour Law, the probation period cannot exceed six months or be extended. Once an employee continues working beyond this period, it is considered part of their official service with the company.
Termination or Resignation During Probation
Employer-Initiated Termination: If an employer decides to terminate the contract during probation, they must provide the employee with at least 14 days’ written notice.
Employee-Initiated Resignation: Similarly, if an employee wishes to resign or leave the UAE during the probation period, they must also give 14 days’ written notice.
Changing Jobs Within the UAE
If an employee plans to switch jobs and join a different company within the UAE during probation, they must submit a written notice at least one month before the intended move. In this case, the new employer is required to reimburse the current employer for recruitment costs, unless both parties agree otherwise.
Job Classification in the UAE: 9 Professional Levels
The Ministry of Human Resources and Emiratisation (MoHRE) categorizes jobs in the UAE into nine professional levels, aligned closely with the standards set by the International Labour Organization (ILO). These levels help structure the workforce based on skill sets, qualifications, and job responsibilities, ensuring consistency and transparency across various sectors.
The nine professional levels of jobs in the UAE are:
Level 01: Legislators, Managers, and Business Executives
Includes individuals in top leadership and decision-making positions who shape policies and oversee operations.
Examples: government leaders, CEOs, department managers.
Level 02: Professionals
Roles that require advanced academic qualifications, typically a bachelor’s degree or higher, that are focused on specialised knowledge or expertise.
Examples: doctors, engineers, lawyers, educators.
Level 03: Technicians
Positions that demand technical expertise or practical skills, which are usually supported by vocational training or post-secondary education.
Examples: engineering technicians, lab assistants, medical technicians.
Level 04: Clerical Staff
Involves administrative support and office-based tasks that help organisations streamline their operations.
Examples: administrative assistants, data entry operators, call center agents.
Level 05: Service and Sales Teams
Jobs centered around customer service or selling products, often involving face-to-face interaction with the public.
Examples: Retail associates, hospitality staff, security guards, food servers.
Level 06: Skilled Workers in Agriculture, Fishery, and Animal Husbandry
Workers who perform specialised manual tasks in natural resource industries that often require experience and skill.
Examples: Farmers, equipment operators in agriculture, professional fishermen.
Level 07: Craftsmen in Construction, Mining, and Other Trades
Tradespeople who work primarily with their hands, often in construction, repair, or manufacturing.
Examples: electricians, plumbers, carpenters, welders.
Level 08: Operators and Assemblers of Machinery and Equipment
Individuals who are responsible for operating industrial machinery, vehicles, or working on production lines.
Examples: factory machine operators, drivers, and equipment assemblers.
Level 09: Simple Occupations
Jobs involving basic, routine tasks that generally require physical effort and minimal formal education.
Examples: Cleaners, general laborers, construction helpers, delivery workers.
Criteria for Classifying Work as Skilled
An employee or type of labor is considered "skilled work" only if it meets all of the following conditions:
The work must be performed at a professional level, specifically falling within the first five levels mentioned earlier.
The employee must hold a qualification that is higher than a secondary school diploma or equivalent certificate.
The competent authorities must officially validate the qualification.
The employee’s monthly salary must be no less than AED 4,000.
Working Hours
Regulations regarding working hours in the UAE depend on whether you are employed in the public or private sector.
Public Sector Working Hours
While working hours may slightly vary across the seven emirates, employees in federal government organizations generally follow this schedule:
Workweek: Four and a half days
Monday to Thursday: 8 working hours, from 7:30 AM to 3:30 PM
Friday: Half-day, from 7:30 AM to 12:00 PM
Weekend: Saturday and Sunday are official days off
The local government organisations in Dubai, Abu Dhabi, Ajman, Umm Al Quwain, Ras Al Khaimah, and Fujairah use similar work weeks and working hours. Only the government of Sharjah practises a four-day work week, from Monday to Thursday. Their official weekend is Friday, Saturday, and Sunday.
Private Sector Working Hours
The working hours in the private sector are 8 hours per day or 48 hours per week. During the holy month of Ramadan, the working hours are reduced by 2 hours.
The standard working hours for both sectors can increase or decrease for specific economic sectors or work categories. These are defined in the Executive Regulations of the Labour Law.
The time an employee spends commuting to work is not included in the established working hours. However, exceptions may apply, subject to agreement with the employer or the company.
Employees are also legally entitled to one or more breaks if they work for five consecutive hours. The breaks should be less than an hour long and not included within the standard working hours.
Overtime
Employers in the UAE have the right to request an employee to work overtime. However, overtime must not exceed two hours in one day.
If job demands compel an employee to work way beyond their standard working hours, they are entitled to overtime pay, which is 25% more than their hourly wage. So, if someone earns typically AED 100 per hour, overtime pay would be AED 125 per hour.
The overtime pay range can increase to 50% if it occurs between 10 pm and 4 am. This rule does not apply to employees who have shift-based working hours.
If an employee works on their day off, they are entitled to a substitute day off. The employer must also pay an amount equal to the employee’s regular hourly salary and 50% of this pay.
Leaves in the Private Sector
Annual Leave
After one year of service, employees are eligible for a fully paid annual leave of up to 30 days. If an employee has only been with the company for six months, they are allowed to take 2 days off per month.
Sick Leave
Employees can apply for sick leave after completing the probationary period. They are entitled to 90 days of sick leave a year, which can be continuous or intermittent.
The pay structure for sick leave is as follows:
Initial 15 days: Full salary
Next 30 days: Half salary
Remaining 45 days: Unpaid
For sick leave to be approved, employees must notify their employer within three days of falling ill and provide a medical report issued by an authorised medical entity.
Study Leave
Only employees who have worked with an employer for two years are entitled to a ten-day study leave per year to sit for exams. To get his leave approved, the employee must study at one of the certified educational institutions in the UAE.
Maternity Leave
Female employees are entitled to 60 days of maternity leave. They will receive full pay for the first 45 days and half of their pay for the remaining 15 days. They can also take an additional 45 days of leave without pay if they face an illness due to pregnancy or childbirth that prevents them from resuming work immediately.
Parental Leave
The UAE was the first Arab country to grant parental leave for employees working in the private sector. Employees are entitled to five working days of parental leave. This is paid leave that starts from the day of birth and lasts for six months.
Parental leave applies to both fathers and mothers, and it is a progressive move by the UAE to encourage responsibilities in raising children. It is separate from the maternity holidays for mothers.
Compassionate Leave
Employees can take up to five days of paid leave to grieve the loss of a spouse and three days for the death of a parent, child, sibling, grandchild, or grandparent.
Leave for Hajj (Obligatory Religious Pilgrimage)
Employees in the UAE can request special leave to complete the Hajj. However, it will be considered an unpaid leave and should not exceed 30 days. Leaves for Hajj can be granted to employees only once during their entire period of employment with the same company.
Leave for Umrah (Voluntary Religious Pilgrimage)
The UAE employment law does not provide specific provisions for Umrah leave. Granting leave for Umrah is entirely at the discretion of the employer. Employers may choose to deduct the leave days from the employee’s annual leave balance or approve it as unpaid leave, based on internal company policies or mutual agreement.
National Holidays
Employees in both the public and private sectors are entitled to official leave during public holidays, as mandated by UAE Labour Law. These holidays are observed nationwide and may vary slightly based on moon sightings for Islamic occasions. Some of the key public holidays in the UAE include:
The Gregorian New Year (January 1)
Eid Al Fitr (4 days)
Arafat Day and Eid Al Adah (4 days)
Hijra New Year (Islamic New Year)
Prophet Mohammed’s Birthday
National Day (2 days)
Wages
The employer is solely responsible for paying salary or wages. The salary amount, structure, and schedule must be clearly stated in the employment contract.
All private sector employers should pay their employees through the WPS (Wage Protection System). Failure to comply with the WPS will result in fines and penalties.
The Wage Protection System (WPS) in the UAE is an electronic salary transfer system established by the Central Bank and the Ministry of Human Resources and Emiratisation (MOHRE). It ensures that employees in the private sector are paid their wages on time and in full through registered banks or financial institutions.The salary payments can be in Emirati Dirham or any other currency agreed upon by both parties in the employment contract.
Employee salaries should cover the first and last working day of each month or as specified in the contract. If this period is not specified, then the employee must be paid a minimum once a month. The employer will be in default on paying the salary if they do not pay the employee within the first 15 days after the due date.
Employers can agree with the employee for a shorter period for payment in the employment contract.
Minimum Wages
The UAE Labour Law does not specify a minimum wage. It only defines the salary as being fair enough to cover the basic needs of the employee, depending on the cost of living.
Unpaid or Delayed Salaries
Employees who have any complaints or concerns regarding unpaid or delayed salaries can contact the MoHRE. They can file a salary complaint and wait for the authorities to get back to address the issue.
Gratuity
Employees who have completed more than one year of continuous service with a company are entitled to gratuity upon the termination of the employment contract. The gratuity is calculated as follows:
If the employee has worked for more than a year but less than five years, they are given gratuity pay equivalent to 21 days’ salary for each year of service.
Any employee who has worked for over five years receives a gratuity pay of 30 days’ salary for each year worked beyond the first five.
It is important to note that the total gratuity shouldn’t exceed the salary amount for two years.
The gratuity calculation may differ depending on the type of employment contract. It can be determined by dividing the actual working hours by full-time contract hours, then multiplying the result by 100 to get the percentage. This percentage is then applied to the full-time end-of-service benefits for the gratuity amount the employee should receive.
End-Of-Service Benefits
UAE nationals working under a full-time contract are eligible for end-of-service benefits and pensions. Employers should register entitled employees within 30 days of employment for the General Pension and Social Security Authority pension schemes.
Expats or foreigners working in the private sector are entitled to the following:
Gratuity pay is paid to employees who have completed one year of service in the company. It is calculated according to the last basic salary or wage.
Gratuity pay also applies to any fraction of a year served beyond the first year.
Employers have the right to deduct any outstanding amounts owed by the employee from the gratuity during the final settlement.
These end-of-service benefits should be paid within 14 days of the contract’s expiry date.
Employee Benefits
UAE labour law requires employers to provide certain employee benefits:
Health Insurance
Employers must offer a minimum level of healthcare coverage without deducting premiums from the employee’s salary. However, this requirement applies only to the employee and does not extend to their dependents. While all residents in the UAE are mandated by law to have health insurance, the responsibility for arranging and covering insurance for dependents typically falls on the employee.
Insurance System for Workers (Taa-meen).
Employers can choose between providing a bank guarantee of AED 3,000 or purchasing an insurance policy for each worker. This is required when recruiting new employees.
Unemployment Insurance Scheme
This scheme offers financial support to Emiratis and residents in the federal and private sectors who lose their jobs due to employer termination.
Workplace Health and Safety
Clause 13 of the UAE labour law stipulates that employers should provide employees with a safe, healthy, and appropriate working environment free from hazards or accidents. Any injuries related to work should be reported to MoHRE.
Construction and industrial workers are not allowed to work in summer during certain periods of extreme heat.
Non-Compete Restrictions
The UAE labour law allows employers to have a non-compete restriction in employment contracts. However, they have to be limited and be used only to the extent where necessary, such as:
To protect the company’s legitimate interests
Clearly defined with respect to time, place, and the nature of work.
The non-compete restriction must not extend beyond two years from the date the employment contract ended.
Gender Equality and Discrimination
UAE employment law prevents discrimination in the workplace culture. Similarly, there are laws to protect equal wages and salaries for men and women, ensuring equal job opportunities. This law was established in 2018 and emphasises that men and women should receive the same pay for a given job role.
Termination of Employment
Under the UAE labour law, both the employee and the employer have the right to terminate an employment contract. They can do this by serving a notice period and complying with other legal obligations, depending on the reason for the termination.
Article 42 of the UAE labour law outlines the following situations where an employment contract may be terminated:
The terms of the employment contract expired and were not renewed.
Both the employer and employee have a written agreement to end the labour contract.
Either the employee or the employer may initiate the termination of the employment contract in accordance with the notice period agreed upon in the contract.
The employer’s death.
The employer becomes bankrupt or faces economic or exceptional reasons preventing the continuation of work.
The establishment closes permanently as per the UAE legislation.
The employee dies or cannot work with a proof of medical certificate for sick leave.
The employee faces a final court judgment of a freedom-restriction penalty for a period of not less than three months.
The employee fails to fulfill the conditions that are necessary to renew the work permit outside the employer’s control.
Notice Period of Termination
The initiating party must provide a 30-90 day notice period with a written agreement to terminate the contract for legitimate reasons.
Termination of Contract Without Notice
The employer can terminate the contract without notice if the employee:
Has adopted a false identity.
Has submitted forged documents and certificates.
Has committed a serious error resulting in severe material loss to the employer
Has deliberately damaged the property of the employer.
Has violated the instructions established for employee safety and the place of business.
Has been absent from work without a lawful excuse for more than 20 intermittent days or more than seven successive days.
Has failed to perform the basic duties of the job role outlined in the employment contract and continued in the same behaviour even after receiving many warnings.
Has disclosed confidential information about employer sectors that led to losses or missed opportunities.
Has exploited the job position and their rights to obtain personal results or gains.
Has joined another company without complying with the laws or company policies related to changing workplaces.
Has been found drunk or under the influence of prohibited drugs during working hours.
Has assaulted the employer, the manager, or any colleagues during work.
An employee can terminate the employment contract if the employer:
Fails to meet the legal obligations or rights as mentioned in the contract towards the employee.
Assaults or harasses the employee at the workplace (provided the employee notifies MoHRE of the issue within five working days)
Asks the employee to perform tasks or duties that are fundamentally different from what was agreed in the employment contract when it was signed.
Fails to address or remove factors that threaten the employee’s health and safety even after being informed or aware of those conditions.
Arbitrary Dismissal
If you believe your employer has terminated or fired you without any legitimate reason as per law, you can file a complaint to the Ministry of Human Resources and Emiratisation.
Cancellation of Work Permit
Employers have the right to cancel a work permit once the employment contract ends. The employer should confirm that they have settled everything due to the employee. The work permit cancellation form must have the employee's signature.
Emiratisation
The UAE government has been pushing companies to include more locals, i.e., Emiratis, in the workforce.
The UAE government runs and sponsors a programme called the NAFIS, the Emirati Talent Competitiveness Programme. The primary goal of this initiative is to ensure that at least 10% of young, experienced, and skilled Emiratis are employed in the private sector by 2025.
