UAE Labour Law: Employers Responsibilities & Employees Rights

This article was updated on July 5th, 2023

This article has been researched and written by Carolyn Cairns and the team at Creation Business Consultants and has not used AI in generating this article.

Business owners and companies that are operating and hiring staff in the UAE ought to know their obligations and responsibilities to their employees. Should you be working in the Emirates, it is in your best interests to be aware of and to understand the labour laws of the country and to ensure your employer is following and carrying these out.

Federal Decree Law No. 33 of 2021, implemented from February 2022, is an employers or HR department’s go to reference for guidance and clarification regarding, but not limited to:

• Business working hours.
• Annual leave entitlement.
• Sick, maternity, and special emergency leave.
• Standards on employee work safety.
• Termination of employment.
• End of service calculation and disbursements.

We strongly highlight that employers should know their responsibilities and employees to be aware of their rights. Here we take a closer look at some of the main features of the UAE Labour Law for working in the private sector.

Working in the private sector, Federal Law No. 8 of 1980 Labour Law, now replaced by Federal Decree Law No. 33 of 2021, governs the labour rights of employees in the private sector. UAE Labour Law covers a series of job-related matters. Ministry of Human Resources and Emiratisation (MoHRE) is the government entity responsible for overseeing that employer-employee relations are met, being carried out and performed correctly.

WORKING HOURS

Article 17 of the Federal Decree Law No. 33 of the UAE Labour Law 2021 identifies the normal business working hours within the private sector which is set out as 8 hours per day or 48 hours per working week. Working hours can be increased to 9 hours per day for businesses once approval is received from MoHRE. Most business where an employee works for 9 hour day are within the hospitality, consultancy, and food and beverage industry.

The only entities not governed by Labour Law are Government entities where employees operate for 7 hours per working day.

Within the private sector, during the month of Ramadan normal working hours are reduced by two hours daily.

OVERTIME

Once an employee is requested to work beyond normal working hours this is considered as overtime. The employee will  receive a wage equal to the wage corresponding to the normal working hours, which is calculated according to the basic wage plus an increase of not less than twenty five percent (25%) of that wage. It may increase to 50 per cent (50%) if overtime is completed between the time period of 10 pm to 4 am. This rule does not apply on workers who work on basis of shifts.

OFFICIAL LEAVE AND VACATIONS

Officially the weekend starts on Sunday and this typically applies to all workers, excluding those workers on daily wages. If it calls for an employee to work overtime during a Sunday, the employee will be entitled for normal working hours’ pay and an increase of not less than 50% of that sum.

PUBLIC HOLIDAYS

All employees are entitled for paid leave during the following 8 public holidays:

• Gregorian New Year
• Eid Al Fitr
• Arafat and Eid Al Adha
• Hijri New Year
• Prophet Mohammed’s birthday
• Martyr’s Day
• National Day

ANNUAL LEAVE

Each employee is entitled to annual leave and this typically applies as:

• 2 days per month, if they have fulfilled six months of service but less than one year.
• 30 days annual leave, if they have finished one full year of service.

SICK LEAVE

During a period of employment, an employee can take sick leave of not more than 90 days per year subject to conditions stipulated in the law. The employee will receive full pay for the first 15 days, half pay for the next 30 days and no pay for the rest 45 days. Sick leaves are subjected to employee providing valid medical certificate from DHA (Dubai Health Authority)/SEHA (Abu Dhabi Health Services Co).

MATERNITY & LEAVE

Female employees are eligible to 45 full day’s pay for maternity leave and the following 15 days with half pay . Furthermore, the female on maternity leave has the capacity to extend her leave at an unpaid rate for up to a maximum 45 days.

During the first 6 month following delivery of the baby, the female employee nursing their child is able to take two breaks per day to breastfeed her child, provided that the two breaks do not exceed an hour.

A parental leave for a period of (5) five working days, for the worker (either the father or mother), who has a newly born child, in order to take care of his child and the employee is entitled to such leave for a continuous or intermittent period, within (6) six months from the date of the childbirth.

A bereavement leave of (5) five days, in case of death of the husband or wife and (3) three days in case of death of the mother, father, son, brother, sister, grandson, grandfather or grandmother, starting from the date of death.

Employee may be granted a study leave for a period of (10) ten working days per year for the worker who is enrolled or regularly studying at one of the educational institutions approved in the State, in order to sit for exams, provided that the service term at the employer is not less than two years.

PROHIBITION OF ALCOHOL ON WORK PREMISES

No employer or employee may bring or allow others to bring any kind of alcoholic drinks for consumption on work premises.

REDUCTION IN WORKING HOURS

During the hot summer period and at the hottest time of the day construction and industrial workers are not permitted to work. Should a company enforce or have staff work during the designated break time they will be fined anywhere from AED 5,000 up to AED 50,000 per labour worker.

MINIMUM SALARY

Currently, there is no set minimum salary specified in the UAE Labour Law, however, it does reference that salaries need to cover the basic needs of a company’s employees.

UAE Labour Law 2021 states that the minimum wage and cost of living index is determined either in general or for a particular area or a particular profession by virtue of a decree and consent of the Cabinet.

WAGE PROTECTION SYSTEM (WPS)

WPS is a key step to guarantee and safeguard the rights of workers, and to form trust between a company and its employees. Under WPS, the salaries of employees will be transferred to employee’s accounts in banks or financial institutions that are authorized by the Central Bank of the UAE to provide a service.

END OF SERVICE BENEFITS

Should an employee resign of their free-will before completing one year, they will not be entitled to any form of gratuity payment. Whereas, if an employee completes one year of continuous service and resigns, they are entitled to a gratuity for the services fraction of a year.

Working out the end of service gratuity is calculated on the basic salary and not on the total salary of the employee. Additional allowances such as: housing and transportation etc will be not be taken into consideration for gratuity payment calculation… During the end of service calculation should an employee owe any money to the company/employer, the employer can automatically deduct the amount from an employee’s total gratuity  pay out.

Under a limited contract – calculations for gratuity will be as follows:

• If an employee has served for less than 1 year, they are not entitled to any gratuity pay.
• If an employee has served more than 1 year but less than 5 years, they are entitled to full gratuity pay based on 21 days’ salary for each year of work.
• If an employee has served more than 5 years, they entitled to full gratuity pay based on 30 days’ salary for each year of work.

FREE ZONES

Employees that work in free zones are typically not governed by the UAE Labour Law. Each Dubai, Abu Dhabi and North Emirates free zone (there are over 50 UAE free zones) has its own employment/labour law. Therefore, employees are subject to the regulations of their respective free zone authority.

Free zone employees are set out under a contract with the respective free zone authority. The conditions specified in the employment contract must be in accordance with the UAE Labour Law. Free zone employees are sponsored by the respective free zone and not their employer, and must comply to the respective free zone authority rules.

For more information regarding the laws that govern free zones click on the link Complying with labour laws to learn more. Get a free consultation with our Corporate Structuring Team to learn more 📧 [email protected] or 📞 UAE +97148786240.

Carolyn Cairns,
Commercial Director