DIFC and ADGM employment law: The two zones
with laws of their own.

Which employment law applies in DIFC and ADGM?

Federal Decree-Law No. 33 of 2021 applies on the mainland and in the free zones, except where a zone has its own employment law. In practice that means the two financial free zones.

A company licensed in DIFC follows the DIFC Employment Law No. 2 of 2019; a company licensed in ADGM follows the ADGM Employment Regulations 2024, unless it holds a dual licence from the Abu Dhabi Department of Economic Development with staff under the federal law. A company in JAFZA, DMCC or any other zone follows the federal law. The UAE Government portal words this differently, saying each free zone authority has its own employment law; our free zones page explains how we read it.

How does the DIFC Employment Law differ?

The DIFC Employment Law has been amended several times since 2019, most recently by DIFC Law No. 1 of 2025, in force from 15 July 2025. The change that matters most to payroll is older: since 1 February 2020 a DIFC employer pays end-of-service money monthly into a qualifying scheme instead of building up gratuity to pay at the end.

DEWS contributions

The default scheme is DEWS, the DIFC Employee Workplace Savings plan. The employer contributes 5.83 per cent of the employee's monthly basic wage for the first five years of service, and 8.33 per cent from then on. Service before February 2020 counts towards the five years. For the calculation, basic wage is never less than half of the total wage.

Gratuity still exists for service before 1 February 2020. An employee who joined in 2016 is owed gratuity for the four years before the scheme began, at the daily rates in the law on the basic wage at the date employment ends, and DEWS contributions for everything after. If the employer moves that gratuity into the scheme with the employee's written consent, the amount is struck as at the day before the scheme began and the later payment falls away.

Leave and hours

• Annual leave of 20 working days a year, after 90 days of service; at least five days can be carried over, and carried leave lapses after twelve months
• Sick leave of 60 working days in any twelve months: the first 10 on full pay, the next 20 on half, the last 30 unpaid
• Maternity leave of up to 65 working days, paid after a year's service at 33 days on full pay and 32 on half; paternity leave of 5 working days
• Working time averaging 48 hours a week, and no more than six hours a day for Muslim employees during Ramadan

Pay and claims

Wages are due within seven days of the end of each pay period, with an itemised statement. Final pay is due within fourteen days of employment ending. If it is late and the unpaid amount is more than a week's wage, the employer owes a further day's wage for every day of delay. An employee has six months to bring a claim to the DIFC Courts.

UAE and GCC nationals in DIFC are registered with the pension authority rather than DEWS and earn no gratuity. Where the pension contribution is lower than DEWS would have been, the employer pays the difference, provided it comes to at least AED 1,000 a month.

How do the ADGM Employment Regulations differ?

Abu Dhabi Global Market replaced its 2019 employment regulations with the ADGM Employment Regulations 2024, which took effect on 1 April 2025. They keep much of the federal structure and change the parts that cost money.

• Gratuity keeps the federal daily rates of 21 and 30 days, but on at least half of total pay, with no two-year cap, and owed whatever the reason employment ends
• An employer can offer a pension or savings scheme in place of gratuity, and the employee chooses in writing
• Final pay is due within 21 days, and a late payment can attract a penalty of up to six months' wages
• A repatriation flight is owed within 30 days of leaving, unless the employee was dismissed for cause
• Paying in lieu of notice needs the employee's agreement
• Annual leave of 20 working days accrues from the first day, with at least five days carried over
• UAE and GCC nationals have to be enrolled in their pension within 30 days

What do the DIFC and ADGM rules mean for payroll?

• Know which law each employee is under before applying any rule, from the licence of the company that employs them
• In DIFC, contribute monthly and keep the schedule each month's payment was based on
• In both zones, check that the basic used for end-of-service is at least half of total pay
• Set leave up in working days, not calendar days, for employees in either zone
• MOHRE's Wage Protection System binds establishments registered with the ministry. We found no mention of it in the DIFC law or ADGM's wage sections, so confirm with the zone how wages are monitored for your licence