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United Arab Emirates (UAE)

What to know about hiring and paying in United Arab Emirates (UAE)

With Vensure Global you can expand your global workforce to the United Arab Emirates (UAE) with ease. We help you find, hire, and pay employees accurately and compliantly, ensuring full alignment with local labor laws, payroll regulations, and employer requirements.

Quick Facts

Currency

United Arab Emirates Dirham

Capital

Abu Dhabi

Primary Language(s)

Arabic

Payroll Cycle

Monthly

Population

11 million

Value Added Tax (VAT)

5%

Expanding into United Arab Emirates (UAE)

Thinking about hiring in United Arab Emirates (UAE)? This guide covers the key employment laws, payroll rules, required benefits, and compliance considerations for employers. Explore everything you need to hire and manage talent in United Arab Emirates (UAE) with confidence.

Payroll & Working Hours

Minimum Wage Requirements

There is no minimum salary stipulated in the UAE Labor Law; however, it broadly mentions that salaries must cover the basic needs of the employees. All employers registered with the Ministry of Human Resources and Emiratization (MoHRE) must subscribe to the ‘Wages Protection System (WPS)’ and pay the wages to their employees through it, as per the due dates.

Working hours

  • Primary Time Zone: Gulf Standard Time (GST) – UTC +4.
  • Working Hours: Monday to Friday: Core business hours range from 8:00 AM to 6:00 PM.

Overtime Pay

  • Beyond regular hours: Overtime pay at 125% of normal wage.
  • Nighttime hours (9 PM to 4 AM) or rest days: Overtime pay at 150% of regular hourly rate.

Maximum Hours

  • Standard Hours: Not to exceed 8 hours per day or 48 hours per week.
  • Reduced Hours: During Ramadan, Muslim employees are entitled to reduced working hours.

Break Requirements

Employees working over five consecutive hours are entitled to at least one hour for rest, lunch, and prayers. Night shift workers have the same break entitlements, with additional health and safety measures.

 

Hiring and Onboarding Information​

Background Checks

Type of Background Checks:

  • Educational Credentials: Verify educational qualifications.
  • Employment History: Check past job titles and performance.
  • Criminal Record Check: Ensure no legal impediments.
  • Credit Check: For financial roles, subject to consent.

Verification and New Hire Reporting

Steps:

  • Obtain Necessary Documentation: Secure passport, visa, and offer letter details.
  • Validate Employment Eligibility: Confirm residency visa and submit labor contract to MOHRE.
  • Additional Steps for Remote Hires: Authenticate documents via video conferencing and courier.
  • Register with Wages Protection System (WPS): Compile bank details and ensure salary transfers comply with UAE laws.
  • Conduct Local Compliance Check: Align with Emiratization and occupational health requirements.
  • Submit the New Hire Report: Compile verification documents and submit them to HR within one-week post-hire.

Onboarding Process & Documentation

Collecting Required Documentation

Employers must collect and maintain the following documents:

  • Valid passport copy
  • Visa and Emirates ID
  • Signed employment contract
  • Medical fitness certificate
  • Educational and professional certificates (if applicable)
  • Photographs
  • Bank account details for salary transfer (WPS compliance)

Providing Employee Rights and Obligations

  • Signed Offer Letter
  • Employment Contract
  • Job Description
  • Company Policies and Handbook
  • Health Insurance Card/Details
  • Work Permit and Residence Visa Copy
  • Emirates ID Application Form or Copy
  • Wage Protection System (WPS) Salary Transfer Details
  • Medical Fitness Certificate
  • Emergency Contact and Personal Information Form
  • Acknowledgment Forms

Benefits Packages​

Healthcare

Medical Insurance: As the employer, it is mandatory to provide medical insurance in the UAE. Medical insurance costs vary according to the plan chosen and the employee’s age and gender.

Retirement

Expatriate Employees:

  • The primary system is the End-of-Service Gratuity (EOSG).
  • EOSG is a lump-sum payment made upon termination of employment.
  • It is not a pension or monthly contribution system.

Some employers may offer optional supplementary retirement plans, but these are not mandatory.

UAE Nationals:

  • Must be registered with the General Pension and Social Security Authority (GPSSA).
  • Both employer and employee contribute a legally defined percentage of salary (including certain allowances).

GCC Nationals:

  • Covered by the social security system of their home country.
  • UAE employers facilitate contributions to the relevant GCC authority

Social Security

At this time, Vensure does not have social security details available. You can visit the Federal Authority for Government Human Resources (UAE’s government website) for more information.

Employment Contract Information​

Employment Contract Details

Drafting the Employment Agreement:

  • Comprehensive Employee Information: Include personal and professional details.
  • Duration and Terms of Employment: Define start date, duration, and termination provisions.
  • Salary and Compensation: Outline salary, allowances, payment frequency, and overtime pay.
  • Working Conditions: Detail working hours, leave entitlements, and sick leave policy.
  • Termination Clauses: Include grounds for termination, notice period, and severance benefits.

Types of Contracts

  • Limited-term Contracts: Fixed for a specific duration and automatically end upon the conclusion of the agreed term unless renewed.
  • Unlimited-term Contracts: Open-ended and can be terminated under the provisions specified by UAE Labor Law.

Probation Period

The probation period may not exceed 6 months. During probation, any party desiring to terminate employment during probation give at least 14 days’ notice, and where an employee is joining another UAE-based company, at least 30 days’ notice. Additionally, employers have the right to demand payment from the new employer for the costs incurred in hiring the employee.

Visas

Visitor Visa Types

Tourist Visa:

  • Valid for 30 days, extendable for an additional 30 days.

Visit Visa:

  • For visiting friends or family, valid for 30 or 90 days, extendable once.

Transit Visa:

  • Available for 48 or 96 hours for travelers on a layover.

Requirements for Visitor Visas

  • Valid passport with at least six months’ validity.
  • Completed visa application form.
  • Recent passport-sized photographs.
  • Proof of travel (flight itinerary).
  • Proof of accommodation or a letter of invitation from a UAE resident.
  • Bank statement proving financial ability to support the stay.

Employment Visas

Steps Required:

  • Secure a job offer from a UAE-based employer.
  • Employer applies for an initial work permit with the Ministry of Human Resources and Emiratisation (MOHRE).
  • Entry visa issued for two months.
  • Undergo mandatory health check upon arrival.
  • Apply for an Emirates ID card.
  • Convert entry visa to a residency visa (valid for two or three years).

Residency Visas

  • Types
  • Family Visa: Sponsored by a UAE resident family member.
  • Retirement Visa: For retirees over 55 years old, subject to financial and healthcare criteria.
  • Investor Visa: For property or business investments in the UAE.

Special Cases and Exemptions

  • Some nationalities receive a visa on arrival.
  • Specific agreements between countries and the UAE may provide exemptions or special conditions.
  • Business travelers and event participants may benefit from expedited visa processes.

Visa Application Process

  • Determine the Appropriate Visa Type
    • Identify the visa type based on the purpose of the visit.
  • Gather Required Documentation
    • Valid passport, passport-sized photographs, sponsorship letter (if applicable), proof of financial means.
  • Submit the Application
    • Through an employer or sponsor, or online platforms.
  • Pay Applicable Fees
    • Fees vary depending on visa type and duration.
  • Wait for Processing
    • Processing times vary; plan ahead.

Important Considerations

  • Overstaying Penalties: Fines accrue daily, potential bans from future entry.
  • Medical Testing: Required for employment visa applicants.
  • Accuracy: Ensure all information and documentation are accurate to avoid delays or rejections.
  • Updates: Regularly check for updates on visa policies and regulations.

Independent Contractors

  • Clearly outline project requirements and deliverables.
  • Include scope, compensation, duration, confidentiality, and intellectual property rights.
  • Ensure necessary permits and compliance with UAE regulations.
  • Introduce the contractor to the team, provide resources, and communicate expectations.
  • Regularly assess progress, provide feedback, and address issues.

Risk Management:

  • Ensure clarity between employees and contractors.
  • Limit control to avoid misclassification.
  • Maintain thorough documentation.

Time Off Policies​

Paid Time Off

  • First Year: Two days per month after six months of service.
  • After One Year: Thirty days per year.

Public Holidays

  • New Year’s Day
  • Eid Al Fitr (may vary depending on moon sighting)
  • Arafat Day
  • Eid Al Adha (multiple days)
  • Islamic New Year (Hijri New Year)
  • Prophet Muhammad’s Birthday
  • Commemoration Day
  • UAE National Day

Bereavement

  • 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.

Leave Policies​

Maternity Leave

Employees are entitled to 45 days with full pay, with additional considerations for longer leave.

Paternity Leave

There is no additional Paternity leave in UAE.

Parental Leave

Private sector employees are entitled to five days of paid parental leave, which may be taken any time until the child reaches six months of age. To request leave, employees must provide proof of the child’s birth

Sick Leave

After Probation: Maximum of 90 days per year.

  • First 15 days: Full pay.
  • Next 30 days: Half pay.
  • Subsequent 45 days: Unpaid.

Termination Information

Termination Requirements

Under UAE Labor Law, a minimum notice period of 30 days is mandatory for terminating an employment contract, whether initiated by the employer or the employee. This notice must be given in writing and can be either worked or paid in lieu.

Notice Period

For employees working under the DIFC Employment Law, the required notice period depends on the length of continuous service:

  • Less than 3 months: 7 days’ notice
  • 3 months to less than 5 years: 30 days’ notice
  • 5 years or more: 90 days’ notice

Severance Pay

Employees in the UAE are entitled to end-of-service gratuity (severance pay) upon completing at least one year of continuous service. Gratuity Calculation:

  • For the first five years of service:
    • 21 days’ basic wage per year.
  • For each year beyond five years:
    • 30 days’ basic wage per year.

Any partial year is calculated pro rata.

The gratuity is based on the last drawn basic salary, excluding allowances (e.g., housing, transport).

The total gratuity cannot exceed two years’ total salary for expatriate employees

Unemployment Insurance

To qualify for unemployment compensation, employees must meet four main conditions:

  • Must have been subscribed to the unemployment insurance system for at least 12 consecutive months.
  • Job loss must not be due to disciplinary action under UAE labor laws.
  • Claims must not be fraudulent or based on fictitious employment.
  • Payments stop if the individual secures new employment during the compensation period.

Compensation Structure

  • Compensation is 60% of the employee’s basic salary.
  • Maximum of AED 20,000 per month.
  • Duration is up to 3 months from the date of unemployment.
  • Total coverage is capped at 12 months over the course of an individual’s employment in the UAE

 

Workplace Safety​

Anti-Discrimination Practices

Discrimination includes direct and indirect discrimination based on protected characteristics. Harassment includes sexual and racial harassment.

Employee Expectations: Stay informed, report violations, and cooperate in investigations.

Management Expectations: Enforce the policy, address non-compliance, and support employees.

Workplace Safety Standards

Understanding UAE Safety Laws: Employees and management must familiarize themselves with key provisions of UAE occupational safety and health regulations, including Federal Law No. (8) of 1980 and Ministerial Order No. (32) of 1982.

Safety and Health Responsibilities:

  • Employer Responsibilities: Conduct risk assessments, maintain safety equipment, provide first-aid kits, offer training, and keep records.
  • Employee Responsibilities: Report unsafe conditions, participate in training, use PPE, maintain clean workspaces, and report injuries.

Emergency Procedures:

  • Fire Safety: Trigger alarms, evacuate, assemble at gathering points, and wait for the all-clear.
  • Medical Emergencies: Contact emergency services, administer first aid, and ensure scene safety.
  • Monitoring and Continuous Improvement: Conduct safety audits, update protocols, and encourage open dialogue to address safety concerns.

Workers’ Compensation

Safety and Health Requirements:

  • Familiarize with the OSH Act and participate in mandatory safety training.
  • Identify, assess, and mitigate workplace hazards.

Workers’ Compensation Procedure:

  • All employees are eligible for benefits, report injuries immediately.
  • Claim Process: Document the injury, seek medical attention, submit the claim, cooperate with investigations, and stay in contact with HR.
  • Returning to Work: Obtain medical clearance, discuss job adjustments, and participate in reintegration programs.

Labor Laws

Labor Law Sanctions

  • Non-Payment of Wages: Employers must pay wages on time via the Wages Protection System (WPS). Sanctions consist of fines, suspension of new work permits, and possible downgrade of company classification.
  • Illegal Termination: Terminating an employee without a valid reason or due process is considered arbitrary. Sanctions consist of compensation to the employee (up to 3 months’ salary), reinstatement orders in some cases.
  • Failure to Provide Employment Contracts: All employees must have a written contract registered with MOHRE. Sanctions consist of administrative fines and restrictions on company operations.
  • Violation of Midday Break Rule: Outdoor workers must not work between 12:30 PM and 3:00 PM during summer months. Sanctions consist of fines starting from AED 5,000 ($1,361.29 USD) per worker, up to AED 50,000 ($13,612.85 USD).
  • Discrimination and Harassment: Discrimination based on race, gender, religion, or disability is prohibited. Sanctions consist of legal action, fines, and potential imprisonment depending on severity
  • Failure to Subscribe to Unemployment Insurance: Mandatory for eligible employees. Sanctions consist of AED 400 ($108.90 USD) fine for non-enrollment, AED 200 ($54.45 USD) for late payments.
  • › Hiring Without Work Permits: Employing individuals without valid work authorization is illegal. Sanctions consist of heavy fines, deportation of workers, and blacklisting of employers.

Disclaimer

The information included in this section are provided for reference as samples of official documents derived from government agencies, law firms, or other entities. This content is not and may not be construed to be legal advice or to be a legal opinion on any specific facts or circumstances, or to be a comprehensive or all-inclusive compilation of facts potentially relevant to country, federal, state, or local laws. Any data referenced here is for informational purposes only. It is strongly recommended that any data you view, be carefully reviewed as well as any applicable changes in federal, state, and local laws, regulations, guidance, and guidelines set forth by the governing agencies, which may change at any time and in such instances will render some content in the above information void or inaccurate. Users should not rely on this content for editing and customization exclusively but should consult an attorney for legal guidance for proper and compliant drafting. You are solely responsible for compliance with all applicable laws and regulations.

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