UAE Labour Law Guide 2024
Based on Federal Decree-Law No. 33 of 2021
The definitive employer and employee guide to UAE labour law — covering employment contracts, working hours, leave entitlements, end-of-service gratuity, WPS, Emiratization, and termination rights under the current federal law.
1 Overview — Federal Decree-Law No. 33 of 2021
Federal Decree-Law No. 33 of 2021 on the Regulation of Labour Relations came into effect on February 2, 2022, fully replacing the old Labour Law No. 8 of 1980. It represents the most comprehensive overhaul of UAE employment legislation in over four decades, aligning the UAE's labour market with international best practices and the National Agenda 2031.
The law applies to all private sector employees in the UAE, including free zone employees (unless a specific free zone law applies). Government employees and domestic workers are governed by separate legislation.
Key change: All existing employment contracts had to be converted to the new fixed-term format by February 1, 2023. Failure to comply exposed employers to administrative penalties.
2 Employment Contracts
One of the most significant changes under Federal Decree-Law No. 33 of 2021 is the abolition of unlimited (open-ended) contracts. All employment contracts are now fixed-term with a maximum duration of 3 years, after which they can be renewed for the same or lesser period by mutual agreement.
Mandatory Contract Elements
- ✓ Employee name, nationality, qualifications
- ✓ Job title and description
- ✓ Basic salary and allowances
- ✓ Contract start date and duration
- ✓ Work location
- ✓ Notice period
Work Permit Models (New)
- ✓ Full-time (standard)
- ✓ Part-time (multiple employers)
- ✓ Temporary (task/project-based)
- ✓ Flexible (variable hours)
- ✓ Remote / Telework
Contracts must be in Arabic and English (bilingual). In the event of a dispute, the Arabic version prevails unless both parties agreed otherwise in writing.
3 Working Hours
Overtime: Maximum 2 additional hours per day. Overtime pay is basic salary + 25% for weekday overtime, and basic salary + 50% for overtime on rest days or public holidays.
Rest breaks: Employees must not work more than 5 consecutive hours without a rest break of at least 1 hour (not counted as working time).
Weekly rest: Employees are entitled to a minimum of 1 rest day per week (usually Friday). Some industries allow alternative rest days.
Night shift premium: Employees working between 10 pm and 4 am are entitled to a 25% salary supplement unless employed in a shift system.
4 Leave Entitlements
| Leave Type | Entitlement | Notes |
|---|---|---|
| Annual Leave | 30 days (after 1 year) 2 days/month (under 1 year) |
Paid at full salary. Employer can schedule timing. |
| Sick Leave | 15 days full pay 30 days half pay 15 days unpaid |
Medical certificate required after 2nd day. Total 60 days per year. |
| Maternity Leave | 60 days | 45 days full pay + 15 days half pay. Additional 45 days unpaid for illness. |
| Paternity Leave | 5 days | Must be taken within 6 months of birth. |
| Bereavement Leave | 3–5 days | 5 days for spouse/parent. 3 days for other relatives. |
| Hajj Leave | 30 days unpaid | Once during employment, for Muslim employees only. |
| Study Leave | 10 days/year | For employees with 2+ years service at accredited UAE institution. |
| Parental Leave (new) | 5 days | For both parents, within 6 months of child's birth or adoption. |
5 End-of-Service Gratuity (EOSB)
End-of-service gratuity (also known as EOSB) is a mandatory lump sum paid to employees upon the end of their employment. It is calculated based on the employee's basic salary only (excluding allowances).
First 5 Years
After 5 Years
Maximum gratuity: Total EOSB cannot exceed 2 years' total salary.
Resignation: Employees who resign are still entitled to full gratuity after completing 1 year of service.
Termination for cause: Employers may be entitled to withhold gratuity only in limited circumstances explicitly defined in the law (e.g. gross misconduct).
Alternative scheme: The UAE introduced an optional Savings & Investment Scheme for employers to subscribe their employees in lieu of traditional gratuity.
6 Notice Period
Both the employer and employee must provide written notice within the contractually agreed period. During the notice period, the employee is entitled to full salary and benefits.
Payment in lieu of notice: Either party may opt to pay the equivalent salary in lieu of serving the notice period, provided both parties agree.
Notice period during probation: Either party may terminate during probation with a minimum 14 days' notice (employee seeking another UAE job) or 1 month's notice (employee leaving UAE).
7 Termination of Employment
Under Federal Decree-Law No. 33 of 2021, either party may terminate an employment contract with proper notice. The law distinguishes between lawful termination and arbitrary dismissal.
Valid Grounds for Termination
- ✓ Business restructuring / redundancy
- ✓ End of fixed-term contract
- ✓ Employee performance (with documented warnings)
- ✓ Gross misconduct (Article 44 grounds)
- ✓ Company closure / insolvency
Arbitrary Dismissal (Illegal)
- ✗ Filing a complaint against the employer
- ✗ Gender, race, religion, or nationality
- ✗ Pregnancy or maternity
- ✗ Trade union / employee representation activity
- ✗ No valid reason given
Compensation for arbitrary dismissal: An employee who is arbitrarily dismissed is entitled to compensation of up to 3 months' total salary, in addition to all other entitlements (gratuity, notice pay, unused leave).
8 Wage Protection System (WPS)
The Wage Protection System (WPS) is an electronic salary transfer system mandated by MOHRE (Ministry of Human Resources and Emiratisation). It ensures timely, transparent, and documented salary payments to all private sector employees.
WPS-registered agents (banks, exchange houses) process salary files (SIF — Salary Information File). Employers uploading payroll must submit the SIF through an authorised agent. Delays beyond the 10th trigger escalating penalties, including a ban on new work permits.
9 Emiratization (Nafis)
Emiratization — the policy of increasing UAE nationals in the private sector workforce — is now legally mandated and enforced through the Nafis programme. All private sector companies with 50+ employees must register on the Nafis platform and meet annual Emiratization targets.
Annual Targets
- → 2% increase in Emirati workforce per year
- → Applies to skilled roles (Skill Level 1–3)
- → Measured semi-annually (June & December)
Non-Compliance Penalties
- → AED 6,000/month per unfilled quota position
- → Restrictions on work permit issuance
- → Exclusion from government tenders
HR Khalifa™ provides full Emiratization compliance services including Nafis registration, quota planning, UAE national recruitment, and MOHRE reporting. View Emiratization Services →
Frequently Asked Questions
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