UAE labour law essentials: The labour law,
reduced to what you use.

Which law governs employment in the UAE?

Employment in the UAE mainland is governed by Federal Decree-Law No. 33 of 2021, which replaced the previous law and unified much of what used to differ between limited and unlimited contracts.

Free zones may apply their own employment regulations, and some financial free zones have entirely separate regimes, so the first question with any UAE employment issue is which rules the employee sits under.

What are the UAE working hours and overtime rates?

Standard working time is eight hours a day or forty-eight hours a week. Overtime beyond that is paid at the normal hourly rate plus an uplift, and the uplift depends on when the work happened rather than simply how much of it there was.

The hourly rate is derived from basic salary rather than the total package, which is the same distinction that governs gratuity and the reason the basic figure in a contract matters far beyond the monthly payslip.

How much annual leave does a UAE employee get?

An employee is entitled to thirty calendar days of annual leave for each year of service once they have completed a full year. Between six and twelve months of service, leave accrues at two days a month. Below six months there is no statutory accrual.

The accrual pattern is what causes most of the confusion. A new employee at nine months has not earned a pro-rata slice of thirty days; they have earned eighteen days at the monthly rate. Employers frequently grant more than the statutory minimum, in which case the contract governs.

How does probation work?

A probation period lets either side end the employment on shorter terms than would otherwise apply, with notice requirements that differ from those after confirmation. There are specific rules about how long probation may run and what notice applies where an employee leaves during it, including where they leave to join another UAE employer.

What does an employer owe when employment ends?

Ending employment brings several obligations together at once, and they interact. Notice must be served or paid. Accrued but untaken leave must be settled. End-of-service gratuity is calculated on basic salary at 21 days for each of the first five years and 30 days thereafter, capped at two years' wage.

Outstanding deductions such as loan balances come off the final figure.

• Notice served, or paid in lieu
• Accrued but untaken annual leave settled
• End-of-service gratuity calculated on basic salary
• Outstanding loans, advances and deductions applied
• The final payment made through the wage protection channel like any other

How must salaries be paid?

Salaries must be paid through approved channels with a corresponding file submitted so that payment can be monitored. In the UAE this means generating a Salary Information File from the payroll run and submitting it through a bank or approved exchange house.

The exposure for getting it wrong is administrative penalties and restrictions on issuing new work permits, which for a growing business is the more damaging of the two.

Which records should HR keep?

When a dispute or an inspection arrives, the question is almost always evidential rather than legal. Employers rarely lose because they misunderstood a rule. They lose because they cannot show what happened.

• Employment contracts and any variations to them
• Government identifiers, kept current through renewals
• Attendance records, including corrections and who approved them
• Leave taken, balances and approvals
• Payroll history, wage protection submissions and bank confirmations
• End-of-service calculations and final settlements