Mainland vs free zones: which employment law applies in the UAE
Where the employer is licensed decides the law. A mainland employer, and an employer in most free zones, follows the federal UAE Labour Law, Federal Decree-Law No. 33 of 2021. An employer registered in the DIFC or the ADGM follows that financial free zone's own employment law instead, with its own rules on notice, probation and end-of-service benefits.
UAE mainland and free zones
- Regime confirmed: federal, DIFC or ADGM
- Permits through MoHRE or free zone
- Contracts drafted to that regime
ADGM changes how it enforces its Employment Regulations
What happened
On 28 October 2025 the Abu Dhabi Global Market published the Employment Regulations (Amendment No. 1) 2025, in force on publication. It replaced the Registrar's enforcement procedure with the process in ADGM's Administrative Regulations 2025 and moved fines onto that Fines Scale.
What it means for you
The employment standards themselves did not change, but an ADGM employer that breaches them now faces the Registrar's enforcement powers under the Administrative Regulations. ADGM remains a separate employment regime from the federal Labour Law.
Dates to know
- 1 April 2025ADGM Employment Regulations 2024 came into force, repealing the 2019 Regulations
- 28 October 2025Employment Regulations (Amendment No. 1) 2025 published and in force
Source: Abu Dhabi Global Market. We check this page every week. Last checked .
The UAE has one federal employment law for the private sector and two financial free zones that legislate for themselves. The federal law is Federal Decree-Law No. 33 of 2021 Regarding the Regulation of Employment Relationships, usually called the UAE Labour Law, which replaced Federal Law No. 8 of 1980 on 2 February 2022 and is regulated by MoHRE. It covers every private sector establishment, employer and worker, UAE nationals and expatriates alike, except government employees, the armed forces, police and security, and domestic workers. Employees in most free zones are governed by their free zone authority's employment rules together with the federal Labour Law; the authority, not MoHRE, issues their work permits and residence visas. The exceptions are the Dubai International Financial Centre (DIFC) and the Abu Dhabi Global Market (ADGM), which operate independent employment frameworks: the DIFC Employment Law, DIFC Law No. 2 of 2019, and the ADGM Employment Regulations 2024. Each applies to an employer registered in that zone and to employees based in or ordinarily working from it, or who agree in their contract to be covered.
Which law applies to a mainland employer?
A mainland private sector employer follows Federal Decree-Law No. 33 of 2021, the UAE Labour Law, and its Executive Regulations in Cabinet Resolution No. 1 of 2022. MoHRE issues work permits, registers employment contracts and handles labour complaints. The law applies to UAE nationals and expatriates alike.
The law does not apply to employees of federal and local government bodies, the armed forces, police and security, or domestic workers, who have their own legislation. Some parts of the law treat nationals differently: for example, end-of-service benefits for UAE nationals follow the pensions and social security legislation rather than the Labour Law's gratuity formula.
Do free zones follow the federal Labour Law?
Most do. Employees in UAE free zones are generally governed by their free zone authority's employment rules together with the federal Labour Law, and those rules are typically aligned with it. The practical difference is administrative: the free zone authority, not MoHRE, issues the work permit and residence visa, and the number of visas depends on the zone and the licence package.
Because each free zone has its own procedures, check the authority's rules for visa quotas, contract registration and dispute handling. The optional MoHRE Savings Scheme for end-of-service benefits is also open to employers in free zones.
Which free zones have their own employment law?
The two financial free zones. The DIFC in Dubai has the Employment Law, DIFC Law No. 2 of 2019, now in Consolidated Version No. 5 (July 2025) after five amending laws. The ADGM in Abu Dhabi has the Employment Regulations 2024, which came into force on 1 April 2025 and repealed the Employment Regulations 2019.
The two regimes look more like common law employment codes than the federal law. The DIFC, for example, sets minimum notice by length of service (7 days, 30 days or 90 days) and requires monthly employer contributions to a Qualifying Scheme instead of a lump-sum gratuity for service since 1 February 2020.
Who is covered by the DIFC Employment Law?
It applies to any person with a place of business in the DIFC that employs one or more individuals, and to each of its employees who is based within, or ordinarily works in or from, the DIFC, or who agreed in their employment contract to be subject to the DIFC law.
Some employees can work in the DIFC under another law, such as seconded employees, employees of a UAE government body established by decree, or employees of an employer the DIFC President has exempted. Certain DIFC provisions still apply to them.
Who is covered by the ADGM Employment Regulations?
They apply to any person incorporated, established or registered in the ADGM, or ADGM itself, that employs one or more employees, where the employee is based within or ordinarily works within or from the ADGM, or agrees in the employment contract to be covered.
They do not apply to employers holding a dual licence from the Abu Dhabi Department of Economic Development whose employees are governed by the UAE Labour Law, or to employers the ADGM Board has designated as exempt under the Commercial Licensing Regulations (Exemptions Order) 2025.
Does it matter where the employee lives?
Not directly. The DIFC and ADGM tests look at where the employer is registered and where the employee is based or ordinarily works, or what the contract says. A mainland or ordinary free zone employer applies the federal Labour Law to its private sector staff, wherever in the UAE they live.
Remote work is recognised as a work pattern under the Labour Law's Executive Regulations and MoHRE guidance, and an employee who works remotely with the employer's approval can be required to keep set working hours.
Key figures
| Detail | Value |
|---|---|
| UAE Labour Law in force | Federal Decree-Law No. 33 of 2021 governs employer-employee relations in the private sector. It became effective on 2 February 2022, replacing Federal Law No. 8 of 1980. MoHRE is the competent authority. (source) |
| Scope of the Labour Law, Article 3 | Applies to all establishments, employers and workers in the UAE private sector, UAE nationals and expatriates. Does not apply to employees of federal and local government bodies, the armed forces, police and security, or domestic workers. The Cabinet may exclude further categories. (source) |
| Free zone employees | Generally governed by the employment regulations of the relevant free zone authority together with Federal Decree-Law No. 33 of 2021, with free zone rules typically aligned with the federal law. Certain financial free zones, such as the DIFC and ADGM, operate under their own independent employment frameworks. Work permits and residence visas are applied for through the free zone authority. (source) |
| DIFC Employment Law, current version | Employment Law, DIFC Law No. 2 of 2019, Consolidated Version No. 5 (July 2025), as amended by Employment Law Amendment Law DIFC Law No. 4 of 2020, Employment Law Amendment Law DIFC Law No. 4 of 2021, DIFC Laws Amendment Law DIFC Law No. 2 of 2022, DIFC Laws Amendment Law DIFC Law No. 1 of 2024 and DIFC Laws Amendment Law DIFC Law No. 1 of 2025. It repealed and replaced the Employment Law 2005 (DIFC Law No. 4 of 2005). (source) |
| DIFC Employment Law, who it covers, Article 4 | Applies to any person with a place of business in the DIFC who employs one or more individuals, and to any individual employed by such a person who is based within, or ordinarily works in or from, the DIFC, or who agreed in an employment contract to be subject to the DIFC law. Seconded employees, employees of decree-established UAE government bodies and employees of employers exempted by the DIFC President may be employed under another law. (source) |
| ADGM Employment Regulations 2024, commencement | Came into force on 1 April 2025 (date of publication 3 January 2025). The Employment Regulations 2019 and the Employment Regulations 2019 (Compensation Awards and Limits) Rules 2019 were repealed from that date. (source) |
| ADGM Employment Regulations, who they cover | Apply to all Employers and Employees. An Employer is a person incorporated, established or registered in the ADGM, or ADGM itself, that employs one or more Employees. An Employee is an individual who is based within or ordinarily working within or from the ADGM, or agrees in an Employment Contract to be subject to the Regulations. They do not apply to employers holding a dual licence from the Abu Dhabi Department of Economic Development whose employees are governed by the UAE Labour Law, or to employers designated exempt by the Board. (source) |
| ADGM Employment Regulations (Amendment No. 1) 2025 | Published and in force on 28 October 2025. Replaced section 63 with Registrar enforcement under the Administrative Regulations 2025, deleted sections 64 to 69, and moved fines from the Standard Fines Scale to the Fines Scale in Schedule 1 of the Administrative Regulations. (source) |
Frequently asked questions
Is the DIFC Employment Law the same as the UAE Labour Law?
No. The DIFC has its own Employment Law, DIFC Law No. 2 of 2019, which applies to DIFC-registered employers and to employees based in or ordinarily working from the DIFC. It sets its own minimum notice periods and replaces most of the lump-sum gratuity with monthly contributions to a Qualifying Scheme.
Does a company in a Dubai or Sharjah free zone use federal labour law?
Generally yes, unless the zone is the DIFC. Employees in most free zones are governed by their free zone authority's rules together with Federal Decree-Law No. 33 of 2021. The free zone authority issues the work permit and visa.
Does the ADGM have its own employment law?
Yes. The ADGM Employment Regulations 2024 came into force on 1 April 2025 and replaced the 2019 Regulations. They do not cover employers with a dual Abu Dhabi Department of Economic Development licence whose staff are under the UAE Labour Law.
Does the UAE Labour Law cover Emirati employees?
Yes. It applies to UAE nationals and expatriates working in the private sector. Some entitlements differ, for example Emiratis receive pension and social security benefits instead of the expatriate gratuity.
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.
