UAE employment law appears complex and confusing when looking from an outside view although in some ways there are many similarities to other countries. Both UAE nationals and foreign workers are subject to UAE employment law, with some exemptions for certain categories. For these and many other reasons the following are only guidelines in the broadest sense, and professional legal services are recommended when employing in UAE.
Key Factors to Consider When Employing in United Arab Emirates:
There are several key areas to be aware of within UAE’s employment regulatory framework, especially for companies that plan to initiate a full local office and human resources department. These challenges can be mitigated by use of a locally sourced payroll provider who is familiar with all of the UAE laws and rules for both UAE employees as well as foreign nationals.
According to Article 3 of the Federal Law No. 8 of 1980 Regulating Labour Relations, the Law applies to all staff and employees working in the UAE, whether UAE nationals or expatriates. However, there are certain categories of individuals who are exempted from the Law as listed below:
- Staff and workers employed by the federal government, government departments of the member emirates, the
- Municipalities, public bodies, federal and local public institutions and those staff and workers employed in federal and local governmental projects.
- Members of the armed forces, police and security units.
- Domestic servants.
- Agricultural workers and persons engaged in grazing (this exemption does not include persons who are employed in corporations which process agricultural products and/or those who are permanently engaged in the operation or repair of machines required for agriculture).
A partner in a business is not considered an employee and is therefore not required to obtain a labour card from the UAE. For immigration purposes therefore, a foreign partner will be sponsored by the entity he is a partner in, as an investor rather than as an employee and will deal with the immigration authorities directly rather than through the Labour Office, provided that his name is on the business entity’s license and subject to a minimum investment requirement in the entity. However, if the partner holds an employee position additional to his partner status, he will be considered as an employee for the work he is doing in the company.
On the other hand, employees working on a commission basis are considered as employees even if they are partners in the entity they are working for.
The official body covering employment law in the UAE appears to be the Ministry of Labour.
The following information should be considered as a broad and general guideline, and as always, legal advice is recommended should you require further help.
The employee will not be entitled for any sick leave during the probation period.
Employees who have worked for at least three months (after any probation period)
- Full wage for the first 15 days.
- Half wage for the next 30 days.
- Any following period will be without wage.
Annual Leave Accrual Entitlement
For every year of service, an employee who has worked more than six months and less than a year is entitled to an annual leave of two days leave for every month of service. For employees who have worked over a year, they are entitled to 30 days annually
An employee shall be paid his basic wage plus the housing allowance, if applicable, and any other allowances which he receives in the normal working month.
Maternity Leave in United Arab Emirates
Female employees are entitled to 45 days of paid maternity leave including before and after the delivery, provided the employee has served for at least a year. If they have worked less than a year, the maternity leave shall be granted half pay.
At the end of the maternity leave, a working woman has a right to extend her maternity leave for a maximum of 100 days without pay.
In the UAE the probation period can be for a maximum period of six months. Once completed, the probation period is considered as part of the overall employment term and is taken into account when calculating gratuity and other terminal benefits.