UAE Labour Law 2025: Your Ultimate Guide To Work In Dubai

Who does UAE Labor Law cover?

The UAE Labor Law protects employees and outlines the obligations of employers across the private sector. This includes workers in offices, construction sites, and the hospitality industry, among others.

However, the UAE’s free zones—including ADGM—have introduced additional changes in 2025. For example, ADGM now requires written contracts within one month of employment and recognizes remote workers under formal terms. Parental leave has been extended to include adoptive parents and cases of stillbirth.

So, are Free Zone Companies and JAFZA under UAE Labor Law?

The answer is nuanced. Free zones adhere to general labor rights but have the autonomy to set specific employment regulations. This method helps the UAE bring in global companies by providing adaptable laws and safeguarding workers in all industries.

For employees, knowing which regulations apply to them is crucial for understanding their rights and responsibilities.

Review your work contract. Seek advice from HR or legal advisors. Understand the laws that apply to your employment. This applies whether you work in a free zone or under UAE Labor Law.

New ADGM-Specific Labor Law Enhancements (2025)

Companies operating within the Abu Dhabi Global Market (ADGM) are subject to additional regulatory requirements introduced in 2025. These include:

• Remote employees are now formally recognized in employment classifications
• Written contracts must be issued within one month of the employment start date
• Parental leave policies have been expanded to cover adoptive parents and cases of stillbirth
• Employers must provide nursing breaks and maintain job protection during and after parental leave

These updates bring ADGM regulations closer to international standards and reinforce its commitment to employee welfare.

Employment Contracts and Termination Rules

How does UAE Law Terminate Employment Contracts?

In the UAE, all employment contracts must now be fixed-term, not exceeding three years, and renewable upon agreement. Contracts can still end by agreement, expiration, or for valid reasons such as non-performance or redundancy.

Employers must give written notice to end a contract with an employee. The length of notice depends on the type of contract and agreed terms. Similarly, employees looking to resign should also adhere to the notice period outlined in their contracts to avoid penalties.

What Are the Conditions and Legal Procedures for Termination?

Employers must follow rules to fire an employee. This includes writing reasons for firing and giving notice before termination. If an employee is fired for a good reason, the employer must show proof, like breaking rules or not following policies.

For Employees: Employees intending to leave their job must give notice as per their contract, usually ranging from 30 to 90 days. Resigning employees should fulfill their duties during this period and hand over responsibilities as specified by their employer.

Termination is subject to strict legal provisions. Under the 2025 amendments, any dismissal that results from an employee filing a complaint or labor claim is now explicitly considered unlawful and may entitle the employee to compensation. Both employers and employees need to understand their contract terms and the law to navigate the termination process smoothly. In any case of dispute or uncertainty, seeking legal advice is advisable to ensure compliance with UAE Labor Law.

This section provides a straightforward explanation of how employment contracts can be terminated in the UAE, focusing on legal requirements and procedures without overwhelming the reader with jargon or unnecessary details.

What Are the Rules for Non-Compete Clauses in 2025?

The UAE Labor Law now places specific limits on non-compete clauses to balance business interests and employee mobility. As per the 2025 amendments:

• The duration of non-compete clauses must not exceed two years
• Clauses must be limited in geographic scope and job relevance
• Employers are required to offer compensation to the employee during the non-compete period

Employees can challenge restrictive clauses in court if they are overly broad or unreasonable. These provisions promote fairness while protecting legitimate business concerns.

What Recent Amendments Have Been Made to UAE Labor Law?

To ensure fair employment practices and alignment with international standards, the UAE introduced several significant labor law updates in 2025. The most notable changes include:

• Fixed-Term Contracts Mandatory: All private sector employment contracts must now be fixed-term, not exceeding three years.
• Expanded Leave Entitlements:
  • Maternity leave extended to 60 days (45 days full pay + 15 days half pay)
  • Paternity leave formalized as 5 paid days
  • Study leave introduced—10 paid days per year after two years of service
• Clarified Overtime Pay: 125% for regular overtime, 150% for work during holidays or between 10 PM and 4 AM.
• Non-Compete Clauses Regulated: Must be reasonable in scope, capped at two years, and require employer-paid compensation during the restriction period.
• Dispute Resolution Enhancements:
  • MOHRE can issue binding decisions in claims up to AED 50,000
  • Employers may be required to continue salary payments for up to two months during unresolved disputes
• ADGM-Specific Provisions:
  • Remote workers formally recognized
  • Adoptive and stillbirth parental leave added
  • Mandatory written contracts within one month of employment

These updates reflect the UAE’s commitment to a modern, fair, and competitive labor market. Employers and employees should review their contracts, policies, and practices to ensure full compliance.

Retrospective Laws

A common question concerns whether recent legal changes apply retroactively. In general, UAE Labor Law is applied prospectively—meaning it governs future contracts and actions. However, some employee-favoring amendments, such as those related to end-of-service gratuity calculations or leave entitlements, may be given limited retrospective effect in specific situations to benefit the employee.

Understanding these legal nuances is important. Both employers and employees are advised to stay informed and regularly consult official resources or legal professionals to ensure their employment practices remain compliant with the latest regulations.

Labor Laws of UAE Regarding Working Hours, Overtime and Leave

What Are the Standard Working Hours According to UAE Labor Law?

UAE Labor Law maintains standard working hours at eight per day or forty-eight per week. Overtime remains capped at two hours daily, with clearer 2025 provisions offering 125% pay for extra hours and 150% for night shifts (10 PM–4 AM) or holidays. During the holy month of Ramadan, working hours are reduced by two hours daily. Employees need to know that these standards aim to ensure a healthy work-life balance and safeguard their well-being.

Does UAE Labor Law Allow 24-hour Duty for Healthcare Workers?

Healthcare workers may be required to work beyond the standard hours because of the nature of their work. However, UAE Labor Law mandates compensatory rest or overtime pay for hours worked over the standard limit, ensuring that healthcare professionals are fairly compensated for their essential services.

What Constitutes a Half-Day Leave in UAE Labor Law?

A half-day leave typically refers to taking four hours off from the standard eight-hour workday. This provision allows employees to address personal matters without utilizing a full day's leave, offering flexibility in managing work and personal commitments.

Is There a Maximum Overtime Hours Limit in UAE Labor Law?

Yes, overtime is restricted to a maximum of two additional hours per day. The 2025 law clarifies that overtime must be compensated at 125% of the regular wage, and 150% for work during official holidays, rest days, or between 10 PM and 4 AM.

How Is Overtime Calculated in UAE Labor Law?

Overtime pay is calculated based on the employee's basic wage. For any hour worked over the standard workday, the pay is 125% of the hourly wage. Work during holidays and rest days is compensated at 150% of the regular rate, ensuring employees are fairly rewarded for additional work hours.

What Leaves Entitlements Are Provided by UAE Labor Law?

UAE Labor Law grants several leave entitlements to employees, including annual, sick, and maternity/paternity leave. Employees are encouraged to familiarize themselves with these entitlements to fully benefit from their rights under the law.

1. Annual Leave: Employees are entitled to 30 calendar days of paid annual leave after completing one year of service. Pro-rata leave applies for shorter durations.
2. Sick Leave: After the probation period, employees can avail of sick leave, subject to certain conditions and medical certification.
3. Maternity Leave: Maternity leave is now 60 days—45 days at full pay and 15 days at half pay.
4. Paternity Leave: Paternity leave is officially 5 paid days, applicable to both UAE mainland and free zone companies.
5. Study Leave: Employees are entitled to up to 10 days of paid study leave per year after completing two years of service, subject to employer approval and proof of enrollment.

Understanding these regulations helps employees plan their work and personal lives better, ensuring they make the most of their rights without misunderstanding or misinterpretation.

Labour Laws of UAE for Salary/Wages, Benefits, and Gratuity

How Are Wages and Salaries Regulated in the UAE?

In the UAE, wages and salaries are regulated to ensure timely and fair payment to employees. The Wages Protection System (WPS) is a key component of this regulation, requiring employers to pay wages through an electronic system monitored by the UAE Ministry of Human Resources and Emiratisation (MOHRE). This system helps prevent delays and discrepancies in wage payments, safeguarding employee rights.

Is Housing Allowance Mandatory According to UAE Labor Law?

While UAE Labor Law does not explicitly mandate housing allowances for all employees, many companies include housing as part of their compensation package, especially for expatriate workers. A housing allowance is often negotiated during the hiring process and should be clearly outlined in the employment contract.

How to Compute Gratuity as Per UAE Labor Law?

End-of-service gratuity is a key benefit under UAE Labor Law, calculated based on the employee's basic salary at the time of leaving the company. The gratuity amount is calculated based on the employee's length of service and basic salary, under a fixed-term contract structure now mandated by the 2025 labor law. Generally, for the first five years of service, employees are entitled to 21 days' basic salary for each year of work. Beyond five years, this entitlement increases to 30 and 45 days' basic salary for each additional year.

Calculating end-of-service gratuity:

1. Limited Contract: Full gratuity pay is due provided the employee completes the contract period.
2. Unlimited Contract: Contracts signed before the 2022 reforms, gratuity pay is reduced if the employee resigns before completing five years of service. All current contracts must now follow the fixed-term model introduced in recent reforms.

Understanding the Calculation of End-of-Service Gratuity for Employees

To calculate your gratuity:

1. Identify your basic salary.
2. Determine your type of contract (limited or unlimited).
3. Calculate your years of service.
4. Apply the appropriate rate (21 days' salary per year for the first five years, 30 days' salary per year thereafter).

Employees need to understand their rights regarding pay, benefits, and end-of-service benefits. This will help ensure that they get everything they are entitled to under UAE Labor Law. For any uncertainties or disputes regarding payment, employees should consult with MOHRE or seek legal advice to resolve their issues according to the law.

Workplace Health, Safety, and Accommodation Laws of UAE

What Health and Safety Protections Are Offered to Workers?

UAE Labor Law places a strong emphasis on the health and safety of workers, mandating employers to provide a safe working environment that minimizes risks and prevents accidents. Employers are required to implement safety measures, provide proper training, and ensure that all machinery and equipment are safe to use. Additionally, workers must be supplied with appropriate personal protective equipment (PPE) for their roles.

Regular health and safety inspections are conducted to enforce compliance, and employers found violating these regulations face significant penalties. The law also mandates reporting workplace accidents and injuries to the relevant authorities, ensuring that affected employees receive necessary medical care and compensation.

Are Labor Accommodations Required by UAE Labor Law?

For certain sectors and companies, providing labor accommodation is required by UAE Labor Law, particularly when employees are recruited from abroad or work in remote areas. This accommodation must meet specific health and safety standards, including adequate space, cleanliness, and access to essential utilities. The aim is to ensure that workers live in decent conditions that respect their dignity and contribute to their overall well-being.

These regulations highlight the UAE's commitment to protecting workers' rights and ensuring their health, safety, and comfort. By setting clear standards for workplace safety and worker accommodation, the UAE Labor Law helps create a supportive environment that benefits both employees and employers.

Employers are encouraged to regularly review their health and safety protocols and accommodation provisions to ensure they comply with UAE Labor Law. Workers should also be aware of their rights to a safe work environment and decent living conditions, and they should report any concerns to their employer or the relevant authorities.

Disputes and Compliance Regulations as Per Labour Law of UAE

How Are Labor Disputes Handled in the UAE?

In the UAE, handling labor disputes is structured to encourage swift and fair resolutions, safeguarding the interests of both employees and employers. The process begins with an attempt at amicable settlement. Employees or employers facing a dispute are first advised to seek resolution through direct negotiation. If these talks do not yield results, the next step involves filing a complaint with the Ministry of Human Resources and Emiratisation (MOHRE).

MOHRE now has the authority to issue binding decisions in labor disputes involving claims of up to AED 50,000, streamlining the resolution process. In addition, where salary payments are suspended during an ongoing dispute, MOHRE may instruct the employer to continue paying the employee's wages for up to two months, ensuring financial protection during the resolution period.

If mediation through MOHRE fails, the dispute is escalated to the UAE labor courts, which provide a formal venue for resolving conflicts based on evidence and legal merit.

Who Imposes Labor Laws in the UAE?

Labor laws in the UAE are imposed by the federal government, primarily through the Ministry of Human Resources and Emiratisation (MOHRE). MOHRE is responsible for overseeing the enforcement of labor laws, handling labor disputes, and ensuring the rights and obligations of both employers and employees are met.

The ministry plays a crucial role in regulating the labor market, implementing policies, and introducing reforms to enhance labor practices in the country. Additionally, in the UAE's free zones, respective free zone authorities may enforce their labor regulations in alignment with the federal labor laws, while still ensuring the protection and fair treatment of workers within their jurisdictions.

How Government Regulation and Labor Laws Affect HRM in UAE?

Government regulations and labor laws significantly impact Human Resource Management (HRM) in the UAE. These laws dictate various aspects of employment, from recruitment to termination, and ensure protection against unfair labor practices. HR professionals must stay informed about current laws and regulations to ensure compliance and mitigate legal risks. This includes understanding visa regulations, end-of-service benefits, wage protection systems, and dispute resolution mechanisms.

The dynamic nature of labor laws in the UAE, with continuous updates and amendments, requires HR departments to be agile and proactive in adapting their policies and procedures. By aligning HR practices with legal requirements, companies can foster a positive work environment, enhance employee satisfaction, and avoid potential legal issues.

Labor disputes and the evolving landscape of HRM in the UAE underscore the importance of legal awareness and compliance in the workplace. For employees, understanding your rights and the mechanisms for dispute resolution is key to navigating the labor market confidently. Employers, on the other hand, benefit from establishing clear, fair HR policies that comply with UAE labor laws, ensuring a harmonious and productive workplace.

Training, Visa, and Retirement Regulations in UAE

Are There Specific Regulations for Training Fees and Visa Cancellation?

In the dynamic landscape of UAE labor law, specific regulations address the handling of training fees and visa cancellation, safeguarding the interests of both employers and employees.

Training Fees

Employers sometimes invest in specialized training for their employees. UAE labor law allows companies to include clauses in employment contracts regarding the recovery of training fees if an employee leaves the organization within a certain period after receiving the training. However, these clauses must be clear, fair, and agreed upon by both parties at the time of signing the contract to be enforceable.

Visa Cancellation

The process of visa cancellation is a crucial aspect of employment termination in the UAE. Employers are responsible for canceling an employee's visa upon the termination or completion of their contract. The law mandates timely visa cancellation to avoid legal penalties and ensures that employees can either leave the country or transfer their visa for new employment without issues.

Can an Employer Deduct Training Fees as Per UAE Labor Law?

Yes, but with conditions. Deducting training fees from an employee's end-of-service benefits or final settlement is permissible if previously agreed upon in the employment contract. This agreement must specify the circumstances under which deductions are allowed, ensuring transparency and consent from the employee.

When to Cancel Visa According to UAE Labor Law?

Visa cancellation should occur immediately following the termination of employment, within the timeframe specified by the UAE's immigration authorities. Prompt visa cancellation is essential to comply with legal requirements and facilitate a smooth transition for the employee, whether they are leaving the country or seeking new employment within the UAE.

What Is the Retirement Age as Per UAE Labor Law?

The retirement age in the United Arab Emirates, as per labor law, is set at 60 years old. However, employees can continue working beyond this age with the approval of the Ministry of Human Resources and Emiratisation (MOHRE). In such cases, the employment visa can be renewed annually after reaching the retirement age. This provision allows experienced professionals to contribute to the workforce beyond the standard retirement age, subject to the employer's agreement and legal requirements.

Navigate the complexities of UAE labor law with confidence using HR software tailored for UAE businesses, equipped with comprehensive guides and resources to support your understanding and compliance with the latest regulations.