UAE employment law: what an employer needs to know
Most UAE employers follow Federal Decree-Law No. 33 of 2021, which covers the mainland and most free zones, while DIFC and ADGM have their own employment laws. It sets fixed-term contracts, probation of up to six months, notice of 30 to 90 days, 30 days' annual leave after a year, and an end-of-service gratuity for foreign workers based on basic wage. Emirati staff add pension contributions and Emiratisation targets on top.
What Teamed handles in the UAE
- MoHRE-registered contracts and renewals
- Salaries through the Wages Protection System
- Gratuity and pension contributions
Emiratisation contributions of AED 10,000 a month per unfilled role from 1 July 2026
What happened
The Ministry of Human Resources and Emiratisation confirmed 30 June 2026 as the deadline for companies with 50 or more workers to meet their first-half Emiratisation target. From 1 July 2026 it charges non-compliant companies AED 10,000 per month, AED 120,000 a year, for each position not filled by an Emirati.
What it means for you
The 2% a year target is split into 1% each half year, so a company with 50 or more workers is checked twice a year. Planning Emirati hiring early in each half costs less than paying the contribution.
Dates to know
- 30 June 2026Deadline for the first-half 2026 Emiratisation target
- 1 July 2026Financial contributions of AED 10,000 per month per unfilled position begin
Source: Emirates News Agency (WAM). We check this page every week. Last checked .
UAE employment law is mainly federal. Federal Decree-Law No. 33 of 2021, known as the UAE Labour Law, applies to all establishments, employers and workers in the private sector, except government employees, the armed forces, police and security, and domestic workers. The Ministry of Human Resources and Emiratisation (MoHRE) issues work permits, registers contracts and handles labour complaints. Free zones generally have their own employment regulations, but these sit alongside the federal law and are typically aligned with it. The exceptions are the two financial free zones: the Dubai International Financial Centre (DIFC), which has its own Employment Law, DIFC Law No. 2 of 2019 as amended, and Abu Dhabi Global Market (ADGM), which is exempt from the federal Labour Law and applies its Employment Regulations 2024. Beyond the Labour Law, an employer in the UAE also deals with pension contributions for UAE nationals through the General Pension and Social Security Authority (GPSSA), or the Abu Dhabi Pension Fund for employers in Abu Dhabi, home-country contributions for GCC nationals, Emiratisation targets, the Wages Protection System for paying salaries, and the national unemployment insurance scheme.
Which law applies: mainland, free zone, DIFC or ADGM?
On the mainland and in most free zones, Federal Decree-Law No. 33 of 2021 sets the employment rules. In DIFC and ADGM, their own employment laws apply instead, so where the employer is licensed decides which rulebook you follow.
Free zone authorities usually issue their own employment regulations, but the UAE Government's portal describes them as operating together with the federal Labour Law and typically aligned with it. DIFC and ADGM are different: each runs an independent employment framework with its own rules on leave, termination and end-of-service benefits. ADGM's Employment Regulations 2024 have applied to ADGM-registered businesses and their employees since 1 April 2025. The detail on choosing between the mainland and free zones is on our mainland vs free zones page.
What does a UAE employment contract look like?
The employer must conclude a contract with each worker in a standard form set by the Implementing Regulation, and contracts are fixed-term. They can be extended or renewed by agreement, and if both sides keep working after the term ends without a new agreement, the contract is treated as extended on the same terms.
The original 2021 text capped a fixed-term contract at three years. Official guidance is now inconsistent on whether any maximum still applies: the Government portal's contracts page sets no maximum, while another page still mentions three years. Plan on fixed-term contracts that are renewed as needed, and check the current position before relying on a specific maximum. The law lists full-time, part-time, temporary and flexible work, and the Executive Regulations and MoHRE guidance add remote work and job sharing.
How long can probation last?
Up to six months from the start date, and only once with the same employer. Either side must give written notice to end the contract during probation: the employer gives at least 14 days.
A worker who leaves during probation to join another UAE employer must give at least one month's written notice, and the new employer pays the original employer's recruitment costs unless agreed otherwise. A foreign worker leaving the UAE during probation gives at least 14 days' notice. Probation counts towards the period of service.
What are the working hours and annual leave rules?
Normal working hours are capped at 8 hours a day or 48 hours a week, and full-time workers get at least 30 days' paid annual leave for each year of service. Between six months and a year of service, leave builds up at 2 days a month.
Overtime is limited to two hours a day and is paid at normal pay, based on basic salary, plus at least 25%, rising to at least 50% for overtime between 10pm and 4am, except for shift workers. Working hours are cut by two hours a day during Ramadan. The employer sets leave dates with at least a month's notice, and unused leave is paid out when employment ends.
How much notice must be given to end employment?
Either side can end the contract for a legitimate reason with written notice of at least 30 days and no more than 90 days, as agreed in the contract. The worker is paid in full during notice, and a party that skips notice pays the wage for the notice period instead.
Where the employer ends the contract, the worker may take one unpaid day a week during notice to look for a new job. Notice can be shortened or waived by agreement without reducing the worker's rights. Final wages and all other dues must be paid within 14 days of the contract ending. Dismissal, disputes and the court route are covered on our termination and labour disputes page.
How is end-of-service gratuity calculated?
A full-time foreign worker with at least one year of continuous service gets 21 days' basic wage for each of the first five years and 30 days' basic wage for each year after that. The total cannot exceed two years' wage.
Gratuity is calculated on the last basic wage, without allowances, and part years count in proportion once the first year is complete. Unpaid absence does not count as service. UAE nationals do not receive this gratuity: their end-of-service benefits come from the pension system instead. DIFC and ADGM use their own end-of-service rules. The full calculation is on our end-of-service gratuity page.
What do Emiratisation targets require?
Private companies with 50 or more workers must increase the share of Emiratis in skilled jobs by 2% a year, 1% in each half year. Companies with 20 to 49 workers in 14 named sectors had to hire one Emirati by the end of 2024 and a second by the end of 2025.
From 1 July 2026, companies that miss their target pay AED 10,000 a month, AED 120,000 a year, for each position not filled by an Emirati. Since 1 January 2026, the minimum monthly wage for Emiratis in the private sector is AED 6,000. MoHRE treats fake Emiratisation as a serious violation. The Nafis programme supports Emirati hiring; the detail is on our Emiratisation and Nafis page.
What pension and insurance must an employer pay?
For UAE nationals, the employer registers the employee with the pension system and contributes within a month of the work permit. Expatriates have no state pension and receive gratuity instead, while GCC nationals are covered by their home country's scheme, which the UAE employer must also pay into.
Under Federal Decree-Law No. 57 of 2023, which covers Emiratis entering the labour market on or after 31 October 2023, contributions total 26% of pensionable salary: 11% from the employee and 15% from the employer, with the government paying 2.5% on the employer's behalf where pensionable salary is below AED 20,000. This GPSSA scheme covers employers in every emirate except Abu Dhabi. UAE nationals working for employers in Abu Dhabi are covered by the Abu Dhabi Pension Fund instead, and GCC nationals contribute to their home-country scheme. Separately, most private sector and federal government workers must subscribe to the unemployment insurance scheme. The premium is paid by the worker: AED 5 a month where basic salary is AED 16,000 or less, and AED 10 above that, plus VAT.
How must salaries be paid?
Salaries are paid on their due dates under the rules MoHRE approves, which for most private employers means through the Wages Protection System. Pay is in UAE dirhams unless the contract agrees another currency.
The Government describes the Wages Protection System as making sure employees are paid in full and on time, and paying salaries through it is one of the listed requirements when employing Emiratis. Payroll, the Wages Protection System and the insurance schemes are covered in detail on our WPS, payroll and insurance page.
What changed in the 2024 amendment?
A Federal Decree-Law announced on 11 August 2024 raised fines for hiring without a permit, misusing permits, closing a business without settling workers' rights and fictitious recruitment, including fictitious Emiratisation, to between AED 100,000 and AED 1 million. It also changed how labour disputes reach court.
Where a party disagrees with a MoHRE decision on a labour dispute, the case now goes to the Court of First Instance rather than the Court of Appeal, and claims filed more than two years after employment ends are not heard. The fine for fictitious recruitment is multiplied by the number of workers involved. MoHRE can settle a fictitious employment case before judgment if the employer pays at least half the minimum fine and repays any incentives received.
Key figures
| Detail | Value |
|---|---|
| Main law and who it covers | Federal Decree-Law No. 33 of 2021 applies to all establishments, employers and workers in the UAE private sector. It excludes federal and local government employees, the armed forces, police and security, and domestic workers (Article 3). (source) |
| Free zones, DIFC and ADGM | Free zone employees are generally governed by their free zone authority's employment regulations together with Federal Decree-Law No. 33 of 2021, and these are typically aligned with the federal law. Financial free zones such as DIFC and ADGM operate their own independent employment frameworks. (source) |
| ADGM Employment Regulations 2024 | ADGM is a financial free zone exempt from the UAE federal Labour Law. Its Employment Regulations 2024 and their subordinate rules have applied to ADGM-registered businesses and their employees since 1 April 2025, replacing the 2019 regulations. (source) |
| Fixed-term contracts | Workers are hired on fixed-term contracts. The term may be extended or renewed for a similar or shorter period, and if both parties keep performing the contract after it expires, it is treated as renewed on the original terms. (source) |
| Probation | Up to six months from the start of work, only once with the same employer. The employer must give at least 14 days' written notice to end employment during probation (Article 9). (source) |
| Working hours and overtime | Normal hours are 8 a day or 48 a week (Article 17). Overtime may not exceed two hours a day and is paid at normal pay, based on basic salary, plus at least 25%, or 50% between 10pm and 4am, except for shift workers. Hours are reduced by two a day during Ramadan. (source) |
| Annual leave | At least 30 days' fully paid leave for each year of service, and 2 days a month where service is more than six months but less than a year (Article 29). (source) |
| Notice period | Either party may end the contract for a legitimate reason with written notice of not less than 30 days and not more than 90 days. The party that does not give notice pays the worker's wage for the notice period or the part not served (Article 43). (source) |
| End-of-service gratuity | A full-time foreign worker with one year or more of continuous service receives 21 days' basic wage for each of the first five years and 30 days' basic wage for each year after, calculated on the last basic wage. The total may not exceed two years' wage. UAE nationals receive end-of-service benefits under the pension legislation instead (Article 51). (source) |
| Final pay | The employer must pay the worker's wages and all other entitlements within 14 days of the end of the contract (Article 53). (source) |
| Emiratisation for companies with 50 or more workers | Targeted companies must increase Emiratis in skilled jobs by 2% a year, 1% in the first half and 1% in the second. From 1 July 2026 non-compliant companies pay AED 10,000 per month (AED 120,000 a year) for each position not filled by an Emirati. (source) |
| Emiratisation for companies with 20 to 49 workers | Companies with 20 to 49 workers in 14 specified sectors had to hire at least one UAE citizen by the end of 2024 and one more by the end of 2025. The Government portal lists no further requirement for this group for 2026. (source) |
| Minimum wage for Emiratis | MoHRE has set the minimum monthly wage for Emiratis working in the private sector at AED 6,000, effective 1 January 2026. Employers must register an Emirati employee with the pension system and start contributing within a month of the work permit. (source) |
| Pension contributions for UAE nationals | Under Federal Decree-Law No. 57 of 2023, for Emiratis entering the labour market on or after 31 October 2023, contributions total 26% of pensionable salary: 11% employee and 15% employer. For private sector citizens with pensionable salary below AED 20,000, the government pays 2.5% on the employer's behalf. Earlier registrants stay under Federal Law No. 7 of 1999. This scheme covers employers in every emirate except Abu Dhabi, where UAE nationals are covered by the Abu Dhabi Pension Fund. (source) |
| Expatriates and GCC nationals | There are no pension schemes for expatriate workers in the UAE; they receive end-of-service gratuity instead. UAE employers must make mandatory contributions for GCC national employees under their home country's social security rules. (source) |
| Unemployment insurance (ILOE) | Emiratis and residents working in the private and federal government sectors subscribe, except investors, domestic workers, temporary contract workers, under-18s and pensioners in a new job. The premium is AED 5 a month plus VAT for basic salary of AED 16,000 or less, and AED 10 plus VAT above that. After 12 consecutive months of subscription, it pays 60% of average basic salary for up to 3 months per claim, capped at AED 10,000 or AED 20,000 a month by category. (source) |
| Who pays the ILOE premium | Federal Decree-Law No. 13 of 2022 makes the monthly subscription payable by the insured worker, and covers all workers except the excluded categories (Articles 3 and 4). (source) |
| Wages Protection System | The UAE enforces the Wages Protection System to ensure employees are paid in full and on time. The Labour Law requires wages to be paid on their due dates under the rules MoHRE approves, in UAE dirhams unless the contract agrees another currency (Article 22). (source) |
| August 2024 amendment: fines and disputes | Fines of AED 100,000 to AED 1 million for employing without a proper permit, failing to provide jobs to recruited workers, misusing work permits, closing a business without settling workers' rights, illegally employing minors and fictitious recruitment, including fictitious Emiratisation, multiplied by the number of workers involved. Appeals against MoHRE dispute decisions go to the Court of First Instance, and claims filed more than two years after employment ends are not heard. (source) |
| Labour complaints at MoHRE | MoHRE first tries to settle a dispute amicably. It can issue a final decision where the claim is under AED 50,000 or the parties settle; above AED 50,000 without agreement, it refers the case to the courts. (source) |
Frequently asked questions
Does the UAE Labour Law apply in free zones?
In most free zones, yes: the free zone's own employment regulations sit alongside Federal Decree-Law No. 33 of 2021 and are typically aligned with it. DIFC and ADGM are the exceptions, with their own employment laws.
Are unlimited employment contracts still allowed in the UAE?
No. Contracts under Federal Decree-Law No. 33 of 2021 are fixed-term, and existing unlimited contracts had to be converted. A fixed-term contract can be renewed by agreement, and continuing to work after it ends extends it on the same terms.
Is end-of-service gratuity based on total salary?
No. It is calculated on the last basic wage, without allowances such as housing or transport: 21 days' basic wage a year for the first five years and 30 days a year after, capped at two years' wage.
Do expatriate employees get a pension in the UAE?
No. There is no pension scheme for expatriate workers; they receive end-of-service gratuity instead. UAE nationals are covered by the GPSSA, or by the Abu Dhabi Pension Fund if their employer is in Abu Dhabi, and GCC nationals by their home country's scheme.
Does Emiratisation apply to a small company?
Companies with 50 or more workers must grow Emirati headcount in skilled jobs by 2% a year. Companies with 20 to 49 workers in 14 specified sectors also had Emirati hiring targets for 2024 and 2025. Check the current MoHRE rules if your headcount or sector is near these thresholds.
Each of the six Gulf states writes its own labour law, its own end-of-service rules and its own quota for hiring citizens. When Teamed is your legal employer, we apply the right rules for the country each person works in and update your contracts, policies and payroll as the law changes, so you never have to read a statute to stay compliant.
