Hire in United Arab Emirates
Embark on your journey into human resources best practices and hiring in the United Arab Emirates with these essential steps.
Currency of UAE
United Arab Emirates Dirham (AED)
The Capital of Netherlands
Abu Dhabi
Time Zone in United Arab Emirates
GMT+4
Important Facts About the Country of United Arab Emirates
Introduction to United Arab Emirates
The United Arab Emirates (UAE) is a federation consisting of seven emirates, namely Abu Dhabi, Ajman, Dubai, Fujairah, Ras Al Khaimah, Sharjah, and Umm Al Quwain, located along the eastern coast of the Arabian Peninsula. Governed by individual Sheikhs, these emirates collectively form the Federal Supreme Council, with one Sheikh assuming the role of the UAE’s president. Primarily reliant on petroleum, Abu Dhabi is a major producer, while Dubai functions as a prominent commercial and financial center, steering the country toward economic diversification.
What to Know about United Arab Emirates’s Geography
The UAE shares land borders with Saudi Arabia to the west and south, as well as with Oman to the east and northeast. It also has maritime borders in the Persian Gulf, adjacent to Qatar and Iran. The landscape is predominantly desert, characterized by extensive sandy areas.
Climate in United Arab Emirates
The climate in the UAE is characterized as subtropical-arid, featuring hot summers and mild winters. Coastal areas experience hot and humid conditions, while the interior is hot but dry. The peak of heat occurs in July and August, with average maximum temperatures surpassing 45°C on the coastal plain.
The Culture of United Arab Emirates
The culture of the UAE is rooted in Arabian traditions, shaped by the influences of Persian, Indian, and East African cultures. With a diverse society, the historical population of the country was initially a small tribal community that underwent transformation with the arrival of other nationals in the mid-20th century. Additionally, the UAE was part of the British Empire until gaining independence in 1971.
Religions Observed in United Arab Emirates
Islam stands as the largest and official religion in the UAE. The government adheres to a policy of tolerance towards other religions and seldom intervenes in the religious practices of non-Muslims. With over 60% of the Emirati population being Muslims, predominantly of the Sunni sect, the country also accommodates small yet expanding communities of Christians and Hindus.
Languages Spoken in UAE
Arabic serves as the official language of the UAE, with Emirati people predominantly speaking the Gulf dialect of Arabic. Despite the historical British occupation until 1971, and the presence of numerous expatriates, English has become the primary lingua franca in the UAE. Proficiency in English is often a prerequisite for many local job applications.
UAE Human Resources at a Glance
Employment Law Protections in United Arab Emirates
The regulation of employment in the United Arab Emirates (UAE) falls under federal jurisdiction, primarily governed by the Labour Law, complemented by various Ministerial Decrees and Resolutions. This legislation generally covers employment relationships nationwide, excluding the public sector, domestic servants, and agricultural workers.
Within the UAE, there are 35 free zones, including entities like the Abu Dhabi Global Market (ADGM) and Dubai International Financial Centre (DIFC). These free zones operate under distinct legal systems and possess their own employment regulations, replacing the UAE Labour Law. Key distinctions in the ADGM Employment Regulations and DIFC Employment Law pertain to the employment of foreign and UAE nationals, wage payment, health and safety, and contract termination.
The UAE Labour Law applies to private sector employers and employees, government-owned companies, entities on the UAE mainland regulated by the Ministry of Human Resources and Emiratization (MoHRE), and free zone companies (excluding ADGM and DIFC).
This information specifically addresses employment legislation relevant to the Dubai Development Authority (DDA) Free Zone.
In the UAE, employment contracts, along with other related documents and instructions, are not strictly required to be in Arabic. Contracts in English are widely accepted within the DDA.
Employment contracts are generally required to be in writing, with copies provided to both the employee and the employer. All employees are mandated to have fixed-term employment contracts, not exceeding three years, and these contracts can be extended for a similar duration.
Furthermore, employers must establish internal work regulations in alignment with the New Labour Law.
Every employment contract is required to include the following details:
- Date of the contract
- Commencement date of employment
- Nature and extent of duties
- Location of employment
- Compensation
- In the case of fixed-term contracts, the duration
For individuals holding work permits and residency visas, every employee must possess a written employment contract adhering to an official template. The contract should be formally registered with the Ministry of Human Resources and Emiratisation (MOHRE) or the pertinent free zone authority. The DDA Free Zone provides its standardized employment contracts.
In cases where employment extends for less than 30 days, the employee is exempt from the obligation to have an employment contract or the entitlement to an itemized pay statement.
UAE's Contract Terms
There are no explicit provisions addressing the classification of employees or contractors in the legislation. The designation of an individual as a ‘contractor’ or ‘self-employed’ is not specifically acknowledged under the law.
In certain free zones, a special freelancer visa is available, allowing individuals to work independently. These individuals can establish their consultancy companies, resembling contractors, and provide services within the parameters defined by their trade license. However, such arrangements are subject to limitations.
The New Labor Law has introduced various flexible contract types and working models, including part-time, temporary, flexible, and freelance arrangements. Additionally, remote work is permitted, contingent upon the approval of the employer.
Pre-Employment Checks
An employer has the right to request a candidate to undergo medical examinations at a designated clinic or hospital, with the expenses covered by the employer. Employment may be contingent upon the candidate successfully passing these medical tests.
Pre-employment drug screenings are infrequent. Employers may request a certificate of good conduct to verify the absence of a criminal record in the UAE.
Regarding social media, employers commonly utilize professional platforms like LinkedIn during the recruitment and pre-employment phase.
UAE's Guidelines Regarding Probation Period/Trial Period
Probationary periods can extend up to six months, allowing the employer to terminate the employment contract with a 14-day notice.
An individual cannot undergo more than one probationary period with the same employer. The duration of the probationary period is considered an integral part of the employee’s continuous service with the employer.
In the case of an employee resigning during the probation period, the notice period is outlined as follows:
Notice periods are defined as follows:
- One month: If the employee is transitioning to another employer within the UAE, a one-month notice is mandatory. In this case, the new employer is required to compensate the current employer for the recruitment costs associated with the employee.
- 14 days: If the employee is departing the UAE, they are obligated to provide a 14-day notice to the employer. In this situation, if the employee returns to the UAE within three months, the new employer becomes liable to the previous employer for recruitment costs.
Regulations and Rules Regarding Working Hours in United Arab Emirates
Regular working hours should not surpass eight hours per day, and:
- 48 hours per week distributed across a six-day working week; or
- 40 hours per week scheduled over a five-day working week.
Employees are entitled to a minimum of one day off per week, and the day off does not necessarily have to fall on a Friday.
In specific industries such as commerce, hotels, catering, and security, the daily limit for working hours is nine hours. During Ramadan, the Islamic holy month, normal daily hours must be reduced by two hours.
Travel time between an employee’s residence and workplace is not considered working time. Additionally, employees are not allowed to work continuously for more than five hours without taking a break of at least one hour for rest, meals, and prayer. This break period is not counted as working hours.
The regulations on working hours and overtime exemptions are not applicable to employees in managerial or supervisory positions.
For outdoor workers, such as those on construction sites, a “midday break” is mandated from 12:30 pm to 3:00 pm between June 15 and September 15. Employers are required to provide a shaded rest area and cold drinks. This break is unpaid, and the employees’ workday is split into morning and evening shifts.
In federal government entities, the workweek is 4.5 days, with weekends starting from Friday afternoons, Saturday, and Sunday. In the private sector, employees are entitled to one rest day per week, which does not necessarily have to be on a Friday, although many businesses align with the government’s schedule.
United Arab Emirates Laws Regarding Overtime
Employees are limited to working a maximum of two overtime hours per day unless the work is essential to prevent significant losses, address a serious accident, or manage its aftermath.
Overtime hours, exceeding the standard limits of normal working time, are subject to compensation at a rate of 125% of the regular pay. If overtime is worked between 9 p.m. and 4 a.m., the compensation must be increased to 150% of the normal pay.
On Fridays, recognized as a statutory day off, employers are required to provide:
- an alternative day off in lieu of working on Friday and a remuneration comprising the regular
- salary for the hours worked along with an extra allowance amounting to 50% of that salary.
Timesheets and Record Keeping in UAE
Employers with a workforce of a minimum of five individuals are required to maintain a record for each employee, detailing their name, role, age, nationality, residence, marital status, commencement date of employment, salary, any modifications to salary, disciplinary measures, penalties, occupational injuries, diseases, and the termination date along with reasons. The record should encompass a leave document documenting annual, sick, and other types of leave.
For employers with a staff of at least 15 members, records must be maintained at each worksite, including:
- A payroll record containing details such as the start and end dates of employment, the number of days worked, the amount of daily, weekly, or monthly wages, fringe benefits, and any piecework or commission payments for all workers.
- A comprehensive record of all occupational injuries and diseases incurred by the employees.
- Approved basic work regulations, prominently displayed, outlining daily working hours, the weekly rest period, public holidays, and the measures taken to prevent occupational injuries and fire hazards.
- Disciplinary rules, sanctioned by public labor authorities and conspicuously displayed, specifying applicable disciplinary offenses and the corresponding sanctions.
Employers are required to maintain records for a duration of two years following the termination of an employment contract.
Rules Regarding Bonus and 13th Month Pay in United Arab Emirates
There is no legal obligation to provide bonuses, and the decision to grant bonuses is typically left to the employer’s discretion, unless explicitly outlined in the employment contract, specifying the calculation and payment criteria.
Maternity & Parental Leave
Female employees are entitled to 26 weeks of maternity leave, which can begin as early as eight weeks before the expected delivery date. The remaining weeks can be taken after childbirth. For women expecting their third child or more, the paid maternity leave duration is 12 weeks, with six weeks before and six weeks after the expected delivery date. Maternity leave is granted with full pay if the employee has completed at least 80 days of service with the employer in the 12 months before her expected delivery date. Maternity benefits are paid at the average daily wage rate for the duration of the absence from work. Additionally, female employees receive a medical bonus of INR 3,500 if health benefits are not provided by the employer. If a woman’s job allows, she may work from home after utilizing maternity benefits, based on mutual agreement between her and the employer.
The law also provides for adoption leave of 12 weeks for women adopting a child under three months old. A commissioning mother, who provides her egg for embryo implantation in another woman, is entitled to 12 weeks of leave from the date the child is handed over to her. The woman giving birth, known as the host or surrogate mother, is not eligible for this leave.
Employers are required to inform female workers of their rights under the Act at the time of appointment, both in writing and electronically.
While paternity leave is offered to government employees, it is not mandated in the private sector, and its provision is at the discretion of the employer.
End of Service / Termination
Under the New Labor Law, termination due to redundancy, such as employer insolvency or economic restructuring, is acknowledged. Other grounds for dismissal may include an employee lacking the required skills. In cases of employer-initiated termination, the employee is granted one day of unpaid leave per week to seek new employment.
It is prohibited for employers to terminate a female employee during pregnancy or while on maternity leave.
All outstanding payments owed to employees must be settled within 14 days from the termination date.
United Arab Emirates's Requirements Regarding Notice Periods
An employer and an employee can mutually agree on a notice period, which should be a minimum of 30 days and not exceed 90 days.
Throughout the probation period, the employer is obligated to provide 14 days of notice, while the employee must give 1 month of notice.
Written notice is mandatory. During the notice period, the employee is entitled to full wages and is expected to fulfill job responsibilities, unless the employer states otherwise. Either party may opt to compensate the other for part or all of the notice period at the standard wage rate of the employee.
End of Service Gratuity / Severance Pay in United Arab Emirates
Employees with a minimum of one year of service, excluding any days of unpaid absence, are eligible for a statutory “end-of-service gratuity” upon termination.
Post-Termination Restraints / Restrictive Covenants
Employers have the option to incorporate restrictive covenants in their employment contracts, prohibiting employees from engaging in specific activities, such as joining a competitor, for a specified duration. However, these restrictions are enforceable only to the extent required to protect the employer’s lawful interests. The clauses should be confined in terms of duration, geographical coverage, and relevance to the specific nature of the business.
It is a common industry practice to restrict non-competes to a period of six to 12 months.
Other Termination Formalities
The UAE Labor Law mandates employers in the UAE to furnish an employee with a certificate containing specific details upon the termination of employment, provided the employee requests such documentation. The information encompasses:
- The duration of the employment
- The scope of tasks carried out by the employee throughout the employment
- Specifics of the employee’s compensation package
Data Protection
There is no dedicated legislation on data protection within the Labor Law. Nevertheless, the Penal Code stipulates that employers may gather and utilize personal data solely with the consent of the respective worker or job applicant.
Tax and Social Security Information for Employers in the United Arab Emirates
Personal Income Tax in the United Arab Emirates
The UAE does not impose an income tax on individuals, extending this principle to freelancers and self-employed residents as well.
Social Security in the United Arab Emirates
Employees in the UAE, including UAE or Gulf Cooperation Council (GCC) nationals, have obligations related to the General Pension and Social Security Authority (GPSSA). The employer typically contributes around 12.5%, while the employee’s share is approximately 5%, varying based on their UAE or GCC nationality. These contributions are deducted from the monthly salary.
Social security requirements extend to employees in companies and branches within free trade zones (FTZ). Non-GCC nationals are exempt from social security contributions in the UAE. Residents of other GCC countries may follow a distinct social security contribution scheme aligned with their home nation.
In specific free zones like DMCC, JAFZ, and RAKEZ, aside from pension contributions for UAE/GCC nationals, employers must participate in a private insurance scheme to cover employee compensation for occupational accidents and diseases.
Within DIFC, the DIFC Employee Workplace Savings Scheme (DEWS) mandates employers to contribute either 5.83% or 8.33% of an employee’s basic salary monthly, depending on the duration of the employee’s service.
UAE nationals possessing a UAE family book are eligible for a monthly pension contribution from their employers, with payments directed to the respective emirate’s pensions authority.
For employees in the UAE (excluding those under the Dubai Development Authority jurisdiction), enrollment in an unemployment insurance scheme is mandatory. They are required to make insurance contributions based on the following:
- Employees with a monthly income of AED 16,000 or less are obligated to contribute a minimum of AED 5 per month,
- while those earning more than AED 16,000 per month must contribute a minimum of AED 10 per month.
The provided rates offer a general reference. The specific rates applied by GoGlobal may vary.
Important Information for United Arab Emirates Employees
Salary Payment
In the UAE, it is customary for employers to disburse employee salaries three to five working days before the pay period concludes. The pay duration should not surpass one month for those whose compensation is computed annually or monthly, and for all other workers, payment must occur at least once every two weeks.
Salary disbursement should transpire on a working day, with funds electronically deposited into the respective bank accounts. Payments may be made in UAE Dirhams or other currencies. Employers are prohibited from mandating employees to buy necessities solely from designated stores or to procure products exclusively from the employer.
Payslip
Employees are entitled to receive a detailed pay statement specifying the total remuneration, along with a breakdown of variable or fixed deductions, each serving a particular purpose. Access to electronic pay statements, which can be printed, is deemed acceptable.
Annual Leave
Employees accrue the right to 30 days of paid annual leave upon completing one year of service. In the initial year, annual leave becomes available after six months of service. Subsequently, employees are entitled to two calendar days of paid annual leave per month until completing one year of service. The leave must be utilized in the year it accrues, though employers may opt to establish a policy allowing leave carry-over.
Sick Leave
Employees are eligible for sick leave after completing three months of service with their employer. However, paid sick leave does not accumulate during the probationary period. The statutory sick leave entitlement is a maximum of 90 calendar days per year. During sick leave, the employee is entitled to:
- Full salary for the initial 15 days of sick leave per annum,
- followed by half pay for the 16th to 45th days.
There is no legal obligation for employers to offer sick pay beyond the allocated annual sick leave entitlement. If a worker exceeds 90 days of sickness absence without returning to work, the employer has the right to terminate their employment. In such instances, the worker may qualify for an end-of-service gratuity based on eligibility criteria.
Pilgrimage Leave
Employees have the right, as stipulated by the Labor Law, to take a special unpaid leave of up to 30 days for the purpose of undertaking the Hajj pilgrimage. In ADGM, the duration is 30 days, while in DIFC, it is 21 days. Eligibility for this leave requires a minimum of one year of service.
Maternity & Parental Leave
Pregnant employees have the right to avail 60 days of maternity leave, receiving full pay for the initial 45 days and half pay for the remaining 15 days. This entitlement is applicable to all pregnant female employees, irrespective of their tenure with the employer.
While the law does not specify the start date of the leave, it is expected to be taken around the time of childbirth. In the unfortunate event of a miscarriage, stillbirth, or the death of a child after birth, female employees are entitled to maternity leave benefits.
In the case of giving birth to a disabled or ill infant, a female employee is granted an additional 30 calendar days of maternity leave, extendable by an extra 30 unpaid days if necessary.
Nursing mothers have the right to two paid half-hour breaks during working hours for the first six months upon returning to work. Additionally, pregnant employees can take 45 days of maternity-related sick leave, either consecutively or as needed.
For employees who become fathers, a paternity leave of five working days is provided with full pay.
Compassionate Leave
In the unfortunate event of the death of a close family member, compassionate leave is provided:
- Spouse of the employee: five days
- Immediate family members of the employee: three days
Study Leave
Employees who have completed two years of service or more with an employer and are enrolled in an approved UAE educational institution are entitled to 10 days of study leave per year for taking examinations.
Public Holidays
Employees are entitled to a paid day off on official public holidays. The government currently designates the following public holidays to be observed:
- 1 January (Gregorian New Year’s Day)
- Eid al-Fitr — four days
- Eid al-Adha and Arafat Day — four days
- Islamic New Year’s Day (Al-Hijra)
- The Prophet Mohammed’s birthday
- 1 December (Commemoration Day)
- 2–3 December (National Day) — two days
Benefits to the Employee in UAE
United Arab Emirates Statutory Benefits
The state retirement pension scheme, applicable in the DIFC and ADGM, exclusively caters to UAE nationals.
For foreign national employees in the UAE, employers are mandated to offer private health insurance as a requirement for securing a work visa. While insurance coverage for the employee’s spouse and dependents is commonly provided, it remains discretionary on the part of the employer.
Rules Regarding Visas and Foreign Workers in the United Arab Emirates
General Information
All workers intending to work in the UAE are mandated to obtain a work permit, commonly referred to as a labor card, issued by the Ministry of Human Resources and Emiratisation (MOHRE) upon application by the employer. In UAE free zones, a similar document, often known as an ID card, is issued by the respective authorities.
A pre-employment medical check is obligatory during the visa application process, serving as an immigration-related screening procedure for workers to secure residency visas.
For nationals of the UAE and other Gulf Cooperation Council (GCC) countries (Bahrain, Kuwait, Oman, Saudi Arabia), obtaining a work permit (or its free zone equivalent) is typically sufficient for employment. Non-UAE nationals, however, require an entry permit and residency visa. In areas outside the free zones, the employer must provide the prospective foreign worker with a standard-format job offer letter containing employment details, along with an annex outlining key provisions of the Labor Law.
To initiate the visa processing, the employer must submit a copy of the employment contract to the DDA Free Zone.
To safeguard against potential liabilities for owed pay and benefits, employers must undertake one of the following measures:
To mitigate potential liabilities for owed pay and benefits, employers can opt to either:
- Provide a bank guarantee, with the current deposit being approximately AED 3000 per worker.
- Contribute to a designated insurance scheme designed for this purpose, with the current annual rate set at AED 60 per worker.
Public Holidays Recognized by UAE in 2024
Occasion | Date | |
---|---|---|
1 | New Year’s Day | January 1 |
2 | Eid al-Fitr Holiday | April 8 – 11 |
3 | Arafat Day | June 15 |
4 | Eid al-Adha | June 16 – 18 |
5 | Islamic New Year | July 7 |
6 | Prophet Mohammed’s Birthday | September 16 |
7 | Commemoration Day | December 1 |
8 | UAE National Day | December 2 – 3 |
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