Minimum Wage

General

For expatriates, there is no mandatory minimum wage.

For UAE nationals, the minimum wage is determined by the level of education:

• No high school certificate- 3,000 AED
• High school certificate- 4,000 AED
• College degree or higher- 5,000 AED

The Ministry of Human Resources and Emiratisation (“MOHRE”) announced that new legislation will replace Federal Law No. 8 of 1980 (“Current Labour Law”) as of 2 February 2022. (referred to herein as the New Labour Law)

Payroll

Payroll Cycle

The payroll cycle in UAE is generally monthly, with payment made on the last working day.

13th Salary

There is no requirement for a 13th-month salary payment in the United Arab Emirates.

Working Hours

General

The UAE authorities have announced that for public sector employees, the working week will be reduced to four and a half days, with the weekend running from Friday afternoon to Sunday. The authorities have also confirmed that all schools and universities will operate from Monday to Friday on a four and a half-day working day basis.

In addition, the New Labor Law effective from 2 February 2022 no longer specifies Friday as being the weekly rest day for employees and therefore, private sector employers will have the flexibility to effect changes to work patterns as needed.

Considering this private sector employers may align their respective weekly work schedules to those within the public sector from 1 January 2022. With the increased flexibility introduced under this New Labor Law, (which acknowledges flexible worker roles), employers may shift towards a full five-day Monday to Friday working week with scope for employees who wish to attend Friday congregational prayers, work from home, remotely, or be provided with an extended break to attend prayers.

Usual business hours are from 08:00 to 13:00, resuming after the temperatures have begun to cool from 16:00 and continuing until 19:00. During Ramadan, the working day may be shorter, and Free Zones may also have different working hours.

Overtime

All work above the standard weekly working hours is to be paid as overtime and is regulated by employment contract/collective agreements.  In general, there are two rates of overtime due when overtime is worked. For night-time overtime, between the hours of 9 pm and 4 am, overtime is calculated at 125.00% of the regular salary rate; with 150.00% for any other time.

For work on Fridays, the employee is entitled to an additional paid day off and overtime pay at the rate of 150% of the regular pay.

Working Week

Monday-Friday

Leave

Paid Time Off

Paid leave in UAE is set in the employment contract as a minimum of 30 days paid leave a year, following completion of 1-year service. This leave is in addition to any public holidays.

The employer is required to pay the employee’s salary before the commencement of annual leave.

Following the introduction of the New Labour Law, employees can be required to utilize all annual leave in the applicable annual leave year and employers are now able to have a policy limiting carry-over of leave at their discretion.

Public Holidays

There are 15 public holidays in 2022.

Sick Days

All employees who have completed three months of service are entitled to paid sick leave up to a maximum of 90 days per year and must provide a medical certificate within 48 hours of the first day of sickness.

For the first 15 days of sickness, the employee is entitled to 100.00% of the regular salary rate of pay.  This reduces to 50.00% for the next 30 days, and any subsequent sickness in one year is unpaid.

Maternity Leave

All female employees are eligible for maternity leave.  

Employees who have completed one year of service are entitled to 60 days paid at 100% of the regular salary rate of pay for the first 45 days, reducing to 50.00% of the regular salary rate of pay for the remaining 15 days.  Maternity pay is no longer reduced to 50% for employees who have not completed one year of service.

The employee can take maternity leave before and after the due date.
Employees are also entitled to take up to 45 days (consecutive or intermittent) of unpaid leave due to a medical condition related to pregnancy or delivery upon producing a professional medical certificate.

The New 2022 Labour Law confirms that employers may not terminate, or threaten to terminate, a female employee’s employment because she is pregnant or on maternity leave.

Paternity Leave

There is no additional Paternity leave in UAE.

Parental Leave

There is no additional parental leave in UAE. For private-sector employees, both parents are entitled to 5 days of paid leave. The employees can take leave until the child reaches the age of 6 months.

The Executive Regulations have introduced a condition around parental leave so that the employee will have to provide evidence of the birth of his/her child in order to be entitled to take such leave.

Other Leave

Compassionate leave

• 5 days in the event of the death of an employee’s spouse;  

• 3 days in the event of the death of an employee’s mother, father, son, brother, sister, grandson, or grandparent.

Study Leave

For employees affiliated/studying with an approved UAE education instruction, they will be entitled to 10 days of study leave once they have completed 2 years of service.

Termination

Termination Process

The termination process is standard in UAE and based on labour law requirements unless an employer can provide sufficient cause for dismissal without notice (due to misconduct, etc.)

Notice of termination must be in writing and sent to the relevant governmental authorities.

Notice Period

According to UAE Labor law, a minimum of 30 days mandatory notice period is required.  The amount of notice period for employees who work under the DIFC employment law is determined by length of employment.

This can be as notice days to be worked or paid in lieu, as below:

• 1-5 months of employment – 2 weeks’ notice
• Up to 5 years of employment- 1 months’ notice
• 5+ years of employment- 90 days’ notice

Severance Pay

A worker is entitled a severance pay after completing a full year of service.
The severance pay is as follows:

• 21 days wage for each year of the first 5 years of service
• 30 days’ wage for each year exceeding such period.

Severance pay for the time worked above a full year will be paid prorated.

The severance pay will be calculated based on the last basic wage the employee was entitled to. The severance pay for foreign employees is capped at two years’ wage. If the reason for termination is not recognized by UAE law, the employee may be entitled to additional compensation of 3 months’ pay. With changes implemented in the New Labour Law, employees will still be entitled to their full EOSG (provided that they have at least one year of service with the employer) when they resign from employment. This is also relevant to employees terminated for gross misconduct.

Probation Period

Probation period may not exceed 6 months. During probation, the employer may terminate the employment with a notice period of 14 days. If a foreign worker wishes to terminate the employment contract during the probation period and leave the state, he should give 14 days’ notice. Notice periods can be substituted by equivalent wages.

Common Benefits

General

• Health Insurance for the employee’s spouse and dependents
• Meal vouchers
• Gym/wellness allowance
• Transportation/commuting allowance
• Private health insurance
• Bonus – around 10% of salary per month
• Additional leave – maximum 40 days (10 more days in addition to the statutory entitlement)
• Family health care allowance
• Child education allowance
• Cell phone allowance

VISA

VISA

Any foreigners coming to work in UAE will need to be registered with the UAE immigration authorities.   All foreigners must have secured a job offer from a company operating in the UAE, and some require specific qualifications that the ministry of foreign affairs may require.

For working in Dubai, a UAE Employment Permit/work permit is required.  In general, these are valid for up to two years for anyone offered a job in the UAE and provides the right to live and work in the UAE for the duration of the visa, which is renewable after two years.

VAT

General

The standard rate is 5%.