Employment Law in the UAE

Employment Law

• Employment contracts in the UAE must be provided in writing in English and Arabic and include essential details such as Job Description, Salary, Working Hours, Leave Entitlements, Termination Conditions.
• Employer must issue offer letter and Employment contract through MOHRE (Ministry of Human Resources and Emiratisation).
• The employer must sign an employment contract with the worker based on the agreed work pattern. Must be prepared as Offer Letter and Main Contract using the format specified by Ministry of Human Resources and Emiratisation (MOHRE) and the contract is digitally available in MOHRE Platform.
• MOHRE manages labor affairs in the UAE, ensuring fair employment practices and promoting Emiratisation. It regulates work permits, labor laws, and supports both employees and employers
• In case of extending or renewing the contract, the new term(s) shall be considered an extension of the original term and shall be added to it while calculating the worker’s continuous term of service.

Employment Contract Type

• Limited Contract / Fixed Term Contract

Under this new law, all employment contracts must be fixed-term and cannot exceed three years in length, although they can be renewed. This move from unlimited contracts to fixed-term contracts is aimed at providing clearer expectations and obligations for both employers and employees.

Part-Time Contracts

Part-time contracts are for employees who work fewer hours than full-time employees. Under this type of contract, employees work for one or more employers for specific hours or days.

Temporary Employment contracts in UAE

Temporary contracts are for a specific assignment, ending when the assignment is completed. This
type of contract is common in industries that require project-based work, such as construction or event management

Flexible Contracts

Flexible contracts allow employees to work hours or days that change depending on the employer’s business needs. This type of contract is suitable for employees who require flexibility in their work schedule, such as parents or students

Frequency of Pay

Employers are required to pay wages at least once a month unless otherwise specified in the contract.

• Payments must be made through the Wage Protection System (WPS) for all private sector employees.
• Employers may pay more frequently (e.g. bi-weekly) but must follow the agreed terms in the employment contract.
• Delays in salary payments beyond 15 days from the due date may result in fines or penalties under MOHRE regulations.

Working Hours

Standard working hours under UAE law are:

• Maximum 8 hours per day or 48 hours per week (typically Sunday to Thursday or Monday to Friday).
• During Ramadan, working hours are reduced by 2 hours per day for all Muslim and non-Muslim employees.
• A break (minimum 1 hour) must be provided after 5 consecutive hours of work.
• Employees are entitled to at least one day off per week, usually Friday or Sunday, depending on the business sector.

Penalty Rates

UAE Labour Law does not formally use the term “penalty rates” like Australia, but compensation for working on rest days and public holidays is as follows:

• If an employee works on a rest day or public holiday, they are entitled to:
  • Basic salary + 50% premium, or
  • A day off in lieu on another working day.

Employers must record and compensate all extra hours accurately, and maintain transparent payslips.

Final Settlement

• Final settlement Payment: Employee must be paid Full and Final Settlement payment with in 14 days from the last working day.

Wage Protection System (WPS)

WPS (Wage Protection System) in the UAE is a government-mandated electronic salary transfer system designed to ensure timely and transparent payment of wages to employees in the private sector

• Salaries must be paid by the 1st day of the following month through WPS.
• The previous 15-day grace period has been removed.
• Employers must pay at least 85% of total wages due on time.
• WPS applies to all MOHRE-registered private sector companies.
• Salary delays are monitored automatically from Day 2 after the due date.
• New work permits may be suspended from Day 5 of non-compliance.
• Repeated violations can lead to fines and company downgrading.
• Salaries must be paid through authorized banks, exchange houses, or financial institutions.
• Employers remain responsible for WPS compliance even when payroll is outsourced.
• Payroll teams should process salaries before month-end to ensure funds reach employees by the 1st of the month.
• MOHRE has outlined a clear, escalating framework of consequences for companies that fail to meet the deadline.
• From Day 2 – Electronic monitoring is activated and warning notices are sent to non-compliant employers.
• From Day 5 – The company is suspended from being granted new work permits. The employer is formally notified and required to settle outstanding wages.
• From Day 11 – Administrative fines are imposed in line with Cabinet Resolution No. 21 of 2020. The company is reclassified to the third business category, and repeated violations within a six-month period will trigger further action.
• From Day 16 – Individual or collective labour disputes may be registered on behalf of affected workers. Work permit suspensions are extended. This applies particularly to companies with 25 or more unpaid workers, or to businesses under common ownership where the total affected headcount reaches 25, especially in sectors such as construction, transport and storage, security, cleaning, and recruitment.
• From Day 21 – Authorities may issue executive orders to recover unpaid wages. Precautionary asset seizures and travel bans may be imposed on the individuals responsible for the establishment. For companies with 50 or more employees, collective labour dispute procedures may be initiated.

Please note that all the information listed below are to be used as a general guideline. For more detailed accounts of UAE employment laws and regulations, please visit the official governmental websites.

Updated on: August 2026