UAE Labor Management QA

Email: dxb4ww@evershinecpa.com
The Engaging Manager from Headquarter
Ms. Anna Wang, Speak German, English and Chinese.
skype: burlinna

LRC –UAE Labor Regulations

LRC-AE-20.10

What must be included in the contents of a labor contract in UAE?

Evershine RD:

According to Law No. 33 of 2021; Implementing Regulations 2021; ADGM Employment Regulations, 2019, art. 9.
Employment contracts are required to be written in Arabic with a copy provided to the employee.
The contract must specify:

• The date it was entered into
• The date on which work is to begin
• The type and location of the work
• The duration of the contract (if for a definite term) and
• The amount of the wage

LRC-AE-20.11

Do UAE arrange labor contract in fixed term?
What should be the length of the labor contract in UAE?

Evershine RD:

An employment contract may be for a definite or an indefinite term.
Under the new UAE Labor Law, which took effect on February 1, 2022, employment contracts may not exceed three years and are renewable for the same period or less upon agreement of both parties.
Employers must convert existing unlimited contracts to limited contracts prior to February 1, 2023.

LRC-AE-20.20

What is the minimum age for hiring new employee in UAE?

Evershine RD:

According to Law No. 33 of 2021; Implementing Regulations 2021.
The minimum age for employment in the UAE is 15 years.

LRC-AE-20.40

Is it a requirement for employer in  UAE to conduct a pre-employment background check?

Evershine RD:

The labor code does not address background checks.

LRC-AE-20.50

Is the Non-Competition indemnity clause in labor contract in UAE has legal effect?

Evershine RD:

According to Law No. 33 of 2021; Implementing Regulations 2021.
If an employee’s work involves access to client information or business secrets, the employer may require the employee to agree not to compete with the employer or to participate in any business that competes with the employer for a period of up to two years after termination of the employment contract.
A noncompetition agreement will be valid if the agreement is limited in time, place, and coverage to the terms necessary to safeguard the employer’s legitimate interests.
Effective Feb. 2, 2022, non-compete clauses are no longer valid if the termination of employment is attributable to the employer or its breach of any legal or contractual obligations.

Employees also are exempt from noncompete clauses if:

• They are terminated during their probationary period; or
• They or their new employer pay a specified sum to the former employer, subject to the previous employer’s written consent.

Both parties can also agree in writing not to apply the noncompete clause after termination of the employment contract.

LRC-AE-40.05

What are the regulations on Gender Discrimination in employment specifically for female workers in UAE?

Evershine RD:

According to UAE Constitution, 1971, art. 25.
The UAE Constitution provides that all persons are equal before the law without distinction between citizens in regard to race, nationality, religious belief, or social status, and female and male employees performing the same work are entitled to equal wages.

LRC-AE-50.10

Can the employer in UAE collect, or process data transmitted by employees over the internet?

Evershine RD:

According to Personal Data Protection Law; DIFC Data Protection Law No. 5 of 2020; ADGM Data Protection Regulations 2021.
Employers have the right to monitor their property including computers, phones, and other electronic devices.
Monitoring of employees’ e-mail is permitted if they have been notified in advance and have given their consent.
Employers must ensure that the information they collect does not encroach on employees’ private or family life.

LRC-AE-60.10

What are the regulations on working hours in UAE?

Evershine RD:

According to Labor Law, 1980, No. 8, arts. 65-66, 70; DIFC Employment Law, No. 4 of 2005, arts. 19-24; ADGM Employment Regulations, 2019, arts. 16-21.
Working hours for adult employees cannot exceed 8 per day or 48 per week over a 6-day week.
Daily work hours are reduced by 2 hours per day during Ramadan.

LRC-AE-60.30

What are the regulations on overtime hours in UAE?
What is the overtime premium rate in UAE?

Evershine RD:

According to Labor Law, 1980, No. 8, arts. 67, 71.
An employee who works more than the normal number of hours is entitled to overtime pay of time-and-one-quarter.
The overtime rate for work performed between 9 p.m. and 4 a.m. is time-and-one-half.
Overtime work is limited to 2 hours per day unless such work is essential to prevent a substantial loss or serious accident or to alleviate the impact of a serious accident.
Overtime requirements do not apply to managerial or supervisory positions.
Overtime is capped at 144 hours for every 3-week period and is calculated according to basic salary only.
An employee who works on a day of rest is entitled to wither a substitute rest day or overtime pay of time-and-one-half, while an employee who works on a paid holiday or during annual leave is entitled to substitute leave plus overtime pay of time-and-one-half.
Except for workers who are paid daily, no employee may be required to work more than 2 successive Fridays.

LRC-AE-60.50

Is it common to pay 13^th month’s salary in UAE?

Evershine RD:

According to Labor Law, 1980, No. 8, arts. 134-135.
Employers are not mandated to provide bonus payments to employees, but it is customary to provide a bonus to employees at year-end.

LRC-AE-70.10

What are the regulations on the general leave policy for employees in UAE?

Evershine RD:

According to Labor Law, 1980, No. 8, arts. 75-76, 80, 89; DIFC Employment Law, No. 4 of 2005, arts. 25-28; ADGM Employment Regulations, 2019, arts. 22-25.
Employees who have completed at least 1 year of continuous service with their employers are entitled to 30 days paid annual leave.
Employees with more than 6 months of continuous service but less than 1 year are entitled to 2 days’ annual leave per month of employment.
Employees are entitled to be paid for their annual leave before the leave begins and are not permitted to carry over unused leave.
In the DIFC and the ADGM, the minimum holiday entitlement is 20 working days for a worker employed  for 3 months or more.
Employees in the ADGM can carry over 5 days of annual leave each year, while DIFC workers can carry over 5 days of leave.

LRC-AE-70.20

What are the public holidays in UAE?
What is the overtime premium rate during public holidays in UAE?

Evershine RD:

According to Labor Law, 1980, No. 8, arts. 74-75, 81.
Employees in the UAE are entitled to leave with full pay for the following 10 public holidays, the dates for most of which vary year to year according to the lunar calendar:

• Jan. 1: New Year’s Day
• Birthday of Prophet Mohammed
• Al Isra and Al Mi’raj (Ascension of the Prophet)
• Eid al-Fitr (2 days)
• Eid al-Adha (3 days)
• New Year’s Day (Islamic calendar)
• Dec. 2: UAE National Day

In the event an employee is required to work on a statutory holiday (and is entitled to receive full or partial salary), the employer must provide the employee with compensatory leave and a bonus equal to 50% of the employee’s salary.
If the employer does not provide leave, it must pay a bonus equal to 150% of the employee’s base salary for each day worked.
There is no day in lieu if public holidays fall on a weekend.

LRC-AE-70.30

What is the maternity leave policy for female employees in UAE?

Evershine RD:

According to Labor Law, 1980, No. 8, arts. 30-31; DIFC Employment Law, No. 4 of 2005, arts. 35-37; ADGM Employment Regulations, 2019, arts. 33-36.
Pregnant employees are entitled to 45 days of maternity leave at full pay, plus 15 days maternity leave at half pay.
During the first 18 months after delivery, a female worker is entitled to 2 additional breaks per day of no more than 30 minutes each for the purpose of nursing her child.
In the DIFC and ADGM, female workers are entitled to 65 days of maternity leave following the birth or adoption of a child if the employee has been employed for 12 months or more and has complied with the requisite notification requirements.
The leave will be paid in full for the first 33 days and at half pay for the remainder.

LRC-AE-70.40

What is the paternity leave policy for male employees in UAE?

Evershine RD:

Employees are entitled to 5 paid working days of parental leave, to be taken within 6 months from the birth date of the child.
Employees in the ADGM are entitled to 5 days of paternity leave within 2 months of the child’s birth.
In DIFC, male employees may take up to 5 days of paternity leave if they have at least a year’s service and must notify the employer at least 8 weeks in advance of the due date.
Leave must be taken within the first month of the child’s birth.

LRC-AE-70.50

What are the provisions on sick leave, bereavement leave and personal leave for employees in UAE?

Evershine RD:

Sick leave

According to Labor Law, 1980, No. 8, arts. 82-86; Abu Dhabi Decision No. 25 of 2006.
After completing 3 months of continuous service with an employer after the probationary period, an employee is entitled to annual sick leave not exceeding 90 days.
The first 15 days of sick leave are with full pay, the next 30 days at half pay and any subsequent periods without pay.
Employees are not entitled to paid sick leave during the probationary period.
In the ADGM, employees who have completed at least 1 month of service are entitled to 60 days of paid sick leave per year.
In the DIFC, employees receive 100% sick pay for the first 10days.
Thereafter, sick pay is at 50% for the next 20 days, followed by no sick pay for the next 30 days.

Bereavement leave

Employees are entitled to 5 days’ paid leave for the death of their spouse and 3 days’ paid leave for the death of a parent, child, sibling, grandchild or grandparent.

Study leave

Employees enrolled at one of the UAE’s certified educational institutions are entitled to up to 10 days of paid leave per year to take exams.
Employees must complete 2 years of services to be eligible for this leave.

LRC-AE-70.60

What are the regulations on pension benefits and social security insurance benefits for employees in UAE?

Evershine RD:

There are no provisions for pensions or social security for non-locals in the labor code.
However, employers in the DIFC are required to enroll employees into a qualifying savings scheme and pay contributions to such scheme in place of the employee accruing end of service gratuity entitlements.
Such a scheme can be either the DIFC Employee Workplace Savings Plan established by the DIFC or an alternative qualifying scheme.

LRC-AE-70.70

What are the regulations on Workers’ Compensation for employees in UAE?

Evershine RD:

According to Labor Law, 1980, No. 8, arts. 142-149.
When an employee suffers a work-related injury or contracts an occupational illness, the employer must file a report with the police and the Labor Ministry and pay the cost of the employee’s treatment until the employee either recovers or is proven disabled.
If the injury or illness prevents the employee from working, the employer also must pay the employee’s full salary for the period of treatment or for 6 months, whichever is shorter.
Where treatment lasts longer than 6 months, the employer must pay half the employee’s wages for an additional 6 months or until the employee recovers, is declared disabled or dies, whichever occurs first.
If an employee suffers a partial disability but is capable of performing other work consistent with his or her state of health, the employer must, at the employee’s request, assign the employee to that other work, if available, and pay the employee the wage normally paid to persons who perform that work.

LRC-AE-80.05

Can the employee in UAE join labor union?

Evershine RD:

According to UAE Constitution, 1971, art.33.

UAE law does not authorize trade unions or a right to collective bargaining, although the UAE Constitution does expressly guarantee “freedom of assembly and establishing associations”.

LRC-AE-80.06

How to handle labor disputes in UAE?

Evershine RD:

According to Labor Law, 1980, No. 8, arts. 155-156.
All individual labor disputes must be submitted to the Labor Ministry, which will summon both parties and attempt to settle the dispute amicably.
If the dispute cannot be settled, the ministry must, within 2 weeks, refer the dispute to the competent court with a memorandum containing a summary of the dispute, the arguments of the parties and the department’s comments.
Within 3 days of receiving the case, the court must fix a hearing date and notify the parties.
When a collective labor dispute arises and the parties are unable to settle the matter amicably, the following procedures apply:

• The employees must submit their compliant to the employer in writing and forward a copy to the Labor Ministry.
• The employer must reply in writing within 7 days and send a copy of the reply to the ministry.
• If the employer is making the complaint, it must submit the compliant directly to the ministry, which will then proceed to mediation.
• If mediation does not result in a settlement within 10 days, the ministry must refer the matter to the competent conciliation committee for determination and notify the parties in writing that it has done so.
• If the parties do not settle the matter within 2 weeks after its referral to the conciliation committee, the committee will issue its decision by majority vote.

The decision is binding if the parties have agreed to be bound by it.
Otherwise, the parties have 30 days to appeal the committee’s decision to the Supreme Arbitration Board. Decisions of the Supreme Arbitration Board are final.

LRC-AE-90.10

What are the regulations on workplace safety and health for employees in UAE?

Evershine RD:

According to Labor Law, 1980, No. 8, arts. 91-92.
Employers are required to provide appropriate safety measures to protect employees against occupational injuries and diseases and against fire and other hazards that may result from the use of machines and other work tools.
The employer must also display instructions in an accessible location in the workplace detailing the protective measures necessary to prevent fire and protect the employees against hazards.
The instructions must be in Arabic and, if necessary, other languages understood by the employees.

LRC-AE-100.10

What are the circumstances that an employer can terminate an employee in UAE?

Evershine RD:

According to Labor Law, 1980, No. 8, arts. 117-120; ADGM Employment Regulations, 2019, art. 56.
The employer may terminate a contract for a valid reason at any time upon giving 30 days’ written notice.
Employers are also permitted to terminate an employee for cause without notice or compensation if:

• The employee has assumed a false identity or nationality or has submitted forged certificates or documents.
• The employee has committed a fault resulting in substantial material loss to the employer, provided that the employer notifies the Labor Ministry of the incident within 48 hours of becoming aware of it.
• The employee has disobeyed instructions on workplace safety, provided that such instructions were in writing and posted in a conspicuous place or communicated verbally if the employee is illiterate.
• The employee has defaulted on the basic duties of the employment contract and failed to redress the default despite a written warning that he or she will be dismissed unless performance improves
• The employee has received a final conviction by a competent court of a crime against honor, honesty, or public morals.
• The employee has revealed any confidential information of the employer.
• The employee has been found in a state of drunkenness or under the influence of a narcotic drug during working hours.
• The employee has assaulted the employer, the manager in charge or any co-workers during working hours.
• The employee has been absent from work without a valid reason for more than 20 nonconsecutive days in a single year or for more than 7 consecutive days.
• The employer permanently closes its business
• The employer declares bankruptcy and
• The employee fails to satisfy the requisite immigration requirements.

LRC-AE-100.11

What is the notification period for terminating an employee in UAE?
How much is the severance pay?

Evershine RD:

According to Labor Law, 1980, arts. 131-136; DIFC Employment Law, No. 4 of 2005, art. 60.
In the ADGM, the notice period is as follows:

• 7 days, if the period of continuous employment is less than 3 months;
• 30 days, if the period of continuous employment is at least 3 months but less than 5 years; and
• 90 days, if the period of continuous employment is 5 years or more.

Generally, an employee who has completed one or more years of continuous service is entitled to severance pay in the amount of 21 days’ pay for each of the first 5 years of service and 30 days’ pay for each additional year of service subject to a maximum total severance package of 2 years’ pay.
An employee is entitled to pro rata severance pay for any partial year worked after the first year of continuous service.

LRC-AE-100.12

What is the reporting requirement for employers in UAE to notify the termination of employees to the competent authority?

Evershine RD:

Ministerial Decree No. 212 of 2018 on the Regulation Employing Nationals in the Private Sector prohibits the termination of UAE nationals from their private sector roles, without the prior approval of the Ministry of Human Resources and Emiratisation (MoHRE).

LRC-AE-100.20

What are the regulations on mass layoffs in UAE?

Evershine RD:

No provisions are included in the UAE’s labor code covering plant closings and mass layoffs.

LRC-AE-100.30

What is the time limit for employer in UAE to pay employees upon termination?

Evershine RD:

Federal Decree-Law No. 33 of 2021 requires severance pay and other outstanding payments to be made within 14 days from the end of an employment contract.

Please be aware of below Warning:
The above contents are digested by Evershine R&D  and Education Center in December 2022.
Regulations might be changed as time goes forward and different scenarios will adopt different options.
Before choosing options, please contact us or consult with your trusted professionals in this area.

Contact Us

Dubai Evershine BPO Service Limited Corp.
Email: dxb4ww@evershinecpa.com
The Engaging Manager from Headquarter
Ms. Anna Wang, Speak German, English and Chinese.
skype: burlinna

or
For investment structure relevant to multi-national tax planning and Financial & Legal Due Diligence for M&A (Merge and Acquisition), send an email to HQ4dxb@evershinecpa.com
Dale Chen, Principal Partner/CPA in Taiwan+China+UK will be accountable for your case.
LinkedIn address:Dale Chen

Additional Information

Evershine CPAs Firm Headquarter
6th Floor 378 Chang Chun Rd., Taipei City, Taiwan ROC
Partner Kerry Chen,  USA Graduate School and a well-English speaker
Tel No.: +886-2-27170515 ext. 105
Mobile: +886-939357000
Email: kerrychen@evershinecpa.com
Skype: oklahomekerry

Evershine has 100% affiliates in the following cities:
Headquarter, Taipei, Xiamen, Beijing, Shanghai, Shanghai,
Shenzhen, New York, San Francisco, Houston, Phoenix Tokyo,
Seoul, Hanoi, Ho Chi Minh, Bangkok, Singapore, Kuala Lumpur,
Manila, Dubai, New Delhi, Mumbai, Dhaka, Jakarta, Frankfurt,
Paris, London, Amsterdam, Milan, Barcelona, Bucharest,
Melbourne, Sydney, Toronto, Mexico

Other cities with existent clients:
Miami, Atlanta, Oklahoma, Michigan, Seattle, Delaware;
Berlin, Stuttgart; Prague; Czech Republic; Bangalore; Surabaya;
Kaohsiung, Hong Kong, Shenzhen, Donguan, Guangzhou, Qingyuan, Yongkang, Hangzhou, Suzhou, Kunshan, Nanjing, Chongqing, Xuchang, Qingdao, Tianjin.

Evershine Potential Serviceable City (2 months preparatory period):
Evershine CPAs Firm is an IAPA member firm headquartered in London, with 300 member offices worldwide and approximately 10,000 employees.
Evershine CPAs Firm is a LEA member headquartered in Chicago, USA, it has 600 member offices worldwide and employs approximately 28,000 people.
Besides, Evershine is Taiwan local Partner of ADP Streamline ®.
(version: 2024/07)

Please send an email to HQ4dxb@evershinecpa.com

More Cities and More Services please click Sitemap