This guide is for owners hiring their first or next employees, often after moving a business to the UAE. It sets out what the law requires and what to budget for. Contracts and disputes are work for an employment lawyer.

Which labour law applies to my company?

The federal labour law applies to private-sector employers in the UAE. It does not cover government employees, the armed forces and police, or domestic workers. [1] Free zones set their own employment rules, which must accord with the federal law, and the DIFC and ADGM have separate laws. [2][4][5]

Where the company is registered Employment rules Source
Mainland (any emirate) Federal Decree-Law No. 33 of 2021, with its Implementing Regulation (Cabinet Resolution No. 1 of 2022) [1]
Free zones (other than the DIFC and ADGM) The free zone authority's own rules, and it sponsors the visa. Contracts must accord with the federal law. Some zones apply the federal law directly: DMCC states that employment in its free zone is governed by it. [2][3]
DIFC DIFC Employment Law (DIFC Law No. 2 of 2019), for employers with a place of business in the DIFC [4]
ADGM ADGM Employment Regulations 2024, in force since 1 April 2025. ADGM states it is exempt from the federal labour law. [5][6]

The rest of this guide describes the federal law. Where the DIFC differs on a point, the guide says so.

How do I get a work permit for an employee?

No one may work in the UAE, and no employer may hire, without a work permit from the Ministry of Human Resources and Emiratisation (MoHRE). [1][7] The main steps for a mainland hire are: [8][7]

  1. Job offer. You sign it electronically, in Arabic and English, and the employee signs it before you apply.
  2. Work permit. You apply with the signed offer. MoHRE issues 13 types of permit (recruits from abroad, transfers, part-time staff and others). Most last 2 years.
  3. Contract. The signed offer becomes the employment contract. It must be submitted to MoHRE within 14 days of the employee's arrival, or of the change of status if they are already in the UAE.
  4. Residence visa and Emirates ID. The government's combined "Work Bundle" service handles permit, visa, medical test and fingerprinting together, in about 5 working days instead of 30.

A permit costs between AED 250 and AED 3,450 to issue or renew, depending on how MoHRE classifies your company's compliance record. The job must match your licensed business activity, and the licence must be valid. [7]

You must also lodge bank security of at least AED 3,000 per worker with MoHRE, or buy a worker protection insurance policy, which costs AED 137.50 per skilled worker for 30 months. It covers unpaid wages and gratuity, up to AED 20,000 per worker, if the company cannot pay. [24]

You cannot charge an employee for the cost of recruiting them. [1] For your own residence as the owner, see our UAE residence visa guide.

What must a UAE employment contract include?

Contracts are for a fixed term and can be renewed as often as both sides agree. There is no maximum term: Federal Decree-Law No. 14 of 2022 removed the earlier 3-year cap, so you and the employee agree the length. A renewal counts towards the employee's total service. If both sides carry on after the term ends, the contract continues on the same terms. [1][9]

The Implementing Regulation lists what the contract must state, including both parties' details, the job, start date, workplace, hours and rest days, any probation, the term, the wage with benefits and allowances, annual leave, the notice period and how the contract can end. MoHRE issues standard forms for full-time, part-time, temporary, flexible, remote and job-sharing work. [1] A non-compete clause is allowed where the role gives access to clients or business secrets. It must be limited in time, place and type of work, and cannot last more than 2 years after the contract ends. [1]

Working hours, leave, probation and notice

Rule Federal law Source
Working hours Up to 8 hours a day or 48 a week [1]
Overtime Up to 2 hours a day, paid at basic pay plus at least 25% (plus 50% between 10 pm and 4 am) [1]
Weekly rest At least 1 paid day [1]
Annual leave 30 days a year; 2 days a month between 6 months' and 1 year's service [1]
Sick leave After probation, up to 90 days a year: 15 on full pay, 30 on half pay, the rest unpaid [1]
Maternity leave 60 days: 45 on full pay, 15 on half pay [1]
Parental leave 5 working days, for either parent, within 6 months of the birth [1]
Probation Up to 6 months, once per employer; you must give 14 days' written notice to end it [1]
Notice period Agreed in the contract, between 30 and 90 days, the same for both sides [1]

Remote work, from inside or outside the UAE, is a recognised way of working, and you may set the hours. [1] If a hire will work from another country, ask an adviser in that country whether payroll, tax or social security duties arise there.

How must salaries be paid?

Every company registered with MoHRE must pay wages through the Wage Protection System (WPS), using a bank, exchange house or other institution authorised by the Central Bank. Under Ministerial Resolution No. 340 of 2026, in force since 1 June 2026, the previous month's wages are due on the first day of each month, and at least 85% of the wages due must be paid by then. [10][25]

If you pay late, these steps follow, counted from the due date: [25]

  • From the 2nd day: alerts and notices
  • 5th day: no new work permits until you pay
  • 11th day: if it is a repeat within 6 months, an administrative fine and a move into MoHRE's Third Category of establishments
  • 16th day: for employers with 25 or more workers, labour disputes are registered automatically for the staff affected
  • 21st day: for employers with 50 or more workers that repeat the breach, groups under one owner in sectors such as construction and cleaning, or any employer where MoHRE sees a risk to the labour market: enforced payment of the wages, seizure of assets, a travel ban on the person in charge and referral to the Public Prosecution

The labour law sets no general minimum wage. [10] UAE nationals are the exception (see Emiratisation below).

How is end-of-service gratuity calculated in the UAE?

A full-time foreign employee who completes 1 year of continuous service is entitled to a gratuity when they leave, based on their last basic salary (allowances are not included): [1][11]

  • 21 days' basic pay for each of the first 5 years
  • 30 days' basic pay for each year after that
  • part years count pro rata, once the first year is complete
  • unpaid absence does not count as service
  • the total cannot exceed 2 years' wage

You must pay the gratuity, unpaid wages and other dues within 14 days of the contract ending. [1][11] Part-time staff receive a share in proportion to their hours. [11] UAE nationals receive a pension instead of a gratuity. [1]

For example, on a basic salary of AED 20,000 a month (AED 667 a day, taking 30 days a month), an employee who leaves after 5 years is owed 105 days, about AED 70,000. After 10 years it is 255 days, about AED 170,000. That liability builds up every year, so it belongs in the budget from the first hire.

The savings scheme instead of a gratuity

Under Cabinet Resolution No. 96 of 2023, employers on mainland and in free zones can choose a voluntary alternative, known as the Savings Scheme. [11]

  • You pay a monthly contribution into a fund approved by the UAE securities regulator: 5.83% of basic salary for employees with less than 5 years' service, and 8.33% after that.
  • Contributions are due within 15 days of the start of each month.
  • You can enrol all staff or chosen groups. For those enrolled, you settle the gratuity built up so far and stop accruing a new one.
  • The employee receives the contributions and anything they have earned within 14 days of leaving.

[11]

For example, on AED 20,000 basic, 5.83% is about AED 1,166 a month. The cost is spread evenly instead of falling due when someone leaves.

In the DIFC the gratuity was replaced by the same pattern of monthly contributions, 5.83% then 8.33% of basic pay, into a qualifying savings scheme. [4]

What insurance and pension contributions must an employer pay?

Health insurance. All seven emirates now require it:

  • Dubai: the employer must insure each employee, pay the full cost without charging the employee, and show the policy to issue or renew a residence visa. The rule also covers free zones, including the DIFC. [20]
  • Abu Dhabi: the employer must insure each employee and their dependants (one wife and up to 3 children under 18), and cannot pass on any of the cost. [21]
  • Sharjah, Ajman, Fujairah, Ras Al Khaimah and Umm Al Quwain: since 1 January 2025, employers must buy a policy before a residence permit is issued or renewed. Staff whose permits pre-date 1 January 2025 are covered at their next renewal. [22]

Unemployment insurance. Employees, not employers, must join the federal job-loss scheme, at no more than AED 5 or AED 10 a month depending on salary. Owners of the company are excluded. [23]

Pensions for UAE and GCC nationals. You must register an Emirati employee with the General Pension and Social Security Authority (GPSSA) within the first month and contribute monthly. [12][18]

  • Under the 2023 pension law, contributions are 26% of the contribution salary: 11% from the employee and 15% from the employer, of which the government pays 2.5% where the salary is under AED 20,000.
  • Employees covered by the 1999 law pay 5%, with 12.5% from the employer and 2.5% from the government.
  • The GPSSA laws don't cover the private sector in Abu Dhabi.

[18]

GCC nationals are registered under their home country's scheme, and the employer pays the same share it would for an Emirati. [19]

What are the Emiratisation rules for private companies?

Companies with 50 or more employees must raise the share of Emiratis in skilled jobs by 2% a year: 1% by 30 June and 1% by the end of the year. [15][16] MoHRE expects these companies to reach 10% by the end of 2026. [16][12] Since 1 July 2026, companies that miss the target pay AED 10,000 a month (AED 120,000 a year) for each position not filled by an Emirati. [15]

Companies with 20 to 49 employees in 14 listed sectors had to hire 1 Emirati in 2024 and another in 2025. [12][14] The sectors include information and communications, financial and insurance, real estate, professional services (including accounting and management consultancy), education, health, construction, manufacturing, retail and hospitality. [14] A company that missed the 2025 hire owes AED 108,000 for that year, payable from January 2026. If an Emirati leaves, you must replace them within 2 months or pay the contribution. [14] MoHRE's guidance, read on 29 October 2026, says these companies must recruit at least 1 Emirati and keep those already employed, and sets no further hiring step for 2026. [17]

Minimum salary for Emiratis. Since 1 January 2026, Emiratis in the private sector must be paid at least AED 6,000 a month. Existing salaries had to be raised by 30 June 2026. Since 1 July 2026, an Emirati paid less doesn't count towards your target, and your new work permits are suspended until you comply. [13]

Getting round the targets. Cutting or reclassifying staff, or any other way of avoiding a target, is fined AED 100,000 the first time, AED 300,000 the second and AED 500,000 after that. [16] Hiring Emiratis on paper only ("fake Emiratisation") is also fictitious employment under the labour law (see the penalties below). [1][12]

What are the penalties for breaking UAE labour law?

The labour law, as amended by Federal Decree-Law No. 9 of 2024, sets these fines: [1]

  • AED 100,000 to AED 1,000,000 for employing someone without a work permit, hiring workers and giving them no work, using permits for another purpose, or closing a business without settling staff dues
  • AED 100,000 to AED 1,000,000 for fictitious employment, multiplied by the number of workers involved, plus repayment of any government incentives received
  • fines multiply with the number of workers affected, up to AED 10 million

Disputes go to MoHRE first. MoHRE can decide claims of up to AED 50,000 itself, and no claim can be brought more than 2 years after the employment ends. [1] In the DIFC, the limit is 6 months after the employment ends. [4]

How Marlborough Gulf helps

What we do:

  • We form and run the company, so the licence and its activities match the jobs you plan to fill before the first permit application.
  • We put the full cost of each hire into the budget and the company's accounts: salary, gratuity or savings-scheme contributions, insurance, permit fees and any Emiratisation contribution.
  • We coordinate the hiring timetable with the rest of your move or company plan.

What others do: MoHRE, the immigration authorities or your free zone authority issue work permits and visas. Employment lawyers draft contracts and policies and act in disputes. Licensed insurers provide health cover, and the GPSSA runs pensions for UAE nationals. We don't give HR or employment law advice.

Company formation → Accounting and bookkeeping →

Request a consultation

Questions people ask

How is gratuity calculated in the UAE?

On the last basic salary: 21 days' pay for each of the first 5 years and 30 days for each year after, once 1 year is complete, capped at 2 years' wage. [1][11]

What is the notice period under UAE labour law?

Whatever the contract says, between 30 and 90 days, and the same for both sides. During probation, the employer gives 14 days' written notice. [1]

Is health insurance mandatory for employees in the UAE?

Yes, in every emirate. Employers in Dubai and Abu Dhabi pay for it, and in the other five emirates a policy has been needed to issue or renew a residence permit since 1 January 2025. [20][21][22]

Do free zone companies follow UAE labour law?

Free zone employers follow their free zone's employment rules, and contracts must accord with the federal labour law. DMCC applies the federal law directly. The DIFC and ADGM have separate employment laws. [2][3][4][5]

This guide is general information, not legal or employment advice for your circumstances. Employment rules and fees are set by MoHRE, the free zone authorities and the emirates' health regulators, and change often.

Marlborough Gulf does not give investment, pension or insurance advice. Regulated services are provided by licensed firms, who contract with you directly.

Sources

  1. Ministry of Human Resources and Emiratisation (MoHRE), Federal Decree-Law No. 33 of 2021 Regarding the Regulation of Employment Relationships and its amendments, with Cabinet Resolution No. 1 of 2022 (Implementing Regulation): Articles 3, 6, 8, 9, 10, 17, 19, 21, 29–32, 43, 51, 53, 54, 60 and 62; Regulation Articles 5, 6 and 10. Read 29 Oct 2026. https://www.mohre.gov.ae/assets/download/3bde4984/Federal%20Decree-Law%20No.%2033%20of%202021%20Regarding%20the%20Regulation%20of%20Employment%20Relationship%20and%20its%20amendments_638990571068264034.pdf.aspx
  2. u.ae, Working in free zones, updated 12 Aug 2026. https://u.ae/en/information-and-services/jobs/Sector-of-employment/working-in-free-zones
  3. DMCC, Employment FAQs, version 3, 12 Dec 2022. https://dmcc.ae/hubfs/o2-Website%202023%20Assets/o2-Website%202023-PDF%20Updates%20%28Nov%2023%29/Members/value%20added%20service/Disputes%20Centres%20resources/DMCC_Employment_FAQs-V3.pdf
  4. DIFC, Employment Law, DIFC Law No. 2 of 2019, Consolidated Version No. 5 (July 2025), Articles 4, 10 and 66. https://edge.sitecorecloud.io/dubaiintern0078-difcexperie96c5-production-3253/media/project/difcexperiences/difc/difcwebsite/documents/laws--regulations/employment-law.pdf
  5. ADGM, Employment Affairs Office, read 29 Oct 2026. https://www.adgm.com/operating-in-adgm/employment-affairs-office
  6. ADGM, "ADGM publishes new Employment Regulations". https://www.adgm.com/media/announcements/adgm-publishes-new-employment-regulations
  7. u.ae, Work permits, updated 19 Oct 2026. https://u.ae/en/information-and-services/jobs/Sector-of-employment/employment-in-the-private-sector/work-permits
  8. u.ae, Job offers and the employment process, updated 14 Oct 2026. https://u.ae/en/information-and-services/jobs/Sector-of-employment/employment-in-the-private-sector/Job-offers-and-the-employment-process
  9. u.ae, Employment contracts: duration and models in the private sector, updated 12 Aug 2026. https://u.ae/en/information-and-services/jobs/Sector-of-employment/employment-in-the-private-sector/employment-contracts-duration-and-models-in-the-private-sector
  10. u.ae, Payment of salaries/wages (Ministerial Resolution No. 340 of 2026 on the Wage Protection System), updated 14 Oct 2026. https://u.ae/en/information-and-services/jobs/Sector-of-employment/employment-in-the-private-sector/payment-of-wages
  11. u.ae, End of service benefits for workers in the private sector (including the Savings Scheme, Cabinet Resolution No. 96 of 2023), updated 15 Oct 2026. https://u.ae/en/information-and-services/jobs/Sector-of-employment/employment-in-the-private-sector/end-of-service-benefits-for-employees-in-the-private-sector
  12. u.ae, Employing Emiratis in the private sector, updated 15 Oct 2026. https://u.ae/en/information-and-services/jobs/Sector-of-employment/employment-in-the-private-sector/emiratis-employment-in-private-sector
  13. MoHRE, "MoHRE raises minimum wage for Emiratis in the private sector to AED 6,000 per month, effective 1 January 2026", 31 Dec 2025. https://www.mohre.gov.ae/en/media-center/news/31/12/2025/mohre-raises-minimum-wage-for-emiratis-in-the-private-sector-to-aed-6000-per-month-effective-1
  14. MoHRE, Ministerial Resolution No. 455 of 2023 on Emiratisation targets for establishments employing 20 to 49 employees, 10 Jul 2023. https://www.mohre.gov.ae/assets/download/5e3f93f6/Ministerial%20Resolution%20No.%20455%20of%202023_638945684757690218.pdf.aspx
  15. WAM (Emirates News Agency), "MoHRE reaffirms June 30 deadline for H1 private sector Emiratisation targets", 22 Jun 2026. https://www.wam.ae/en/article/c0uqocb-mohre-reaffirms-june-deadline-for-private-sector
  16. MoHRE, "Up to AED500,000 fines on companies that circumvent Emiratisation targets", 4 May 2023. https://mohre.gov.ae/en/media-center/news/4/5/2023/up-to-aed500000-fines-on-companies-that-circumvent-emiratisation-targets
  17. MoHRE, Emiratisation targets, read 29 Oct 2026. https://mohre.gov.ae/en/guidance-and-awareness-portal-new/emiratisation-targets
  18. General Pension and Social Security Authority (GPSSA), "GPSSA provides breakouts and an explanation to the UAE federal laws regarding pension and social security", 5 Sep 2024. https://gpssa.gov.ae/pages/en/media-center/news/gpssa-provides-breakouts-and-explanation-uae-federal-laws-regarding-pension-and
  19. u.ae, GCC nationals working in the private sector, updated 15 Oct 2026. https://u.ae/en/information-and-services/jobs/Sector-of-employment/employment-in-the-private-sector/gcc-nationals-working-in-the-private-sector
  20. Government of Dubai, Law No. 11 of 2013 Concerning Health Insurance in the Emirate of Dubai, Articles 4, 9 and 10 (Dubai Legislation Portal). https://dlp.dubai.gov.ae/Legislation%20Reference/2013/Law%20No.%20%2811%29%20of%202013.html
  21. Department of Health Abu Dhabi, Law No. 23 of 2005 Concerning Health Insurance in the Emirate of Abu Dhabi and the Implementing Regulation, Law Article 5 and Implementing Regulation Article 11. https://www.doh.gov.ae/-/media/0BE585B5E6814D81913697DD6E644C02.ashx
  22. MoHRE, The Basic Health Insurance Scheme, read 29 Oct 2026. https://mohre.gov.ae/en/media-center/awareness-and-guidance/health-insurance-scheme.aspx
  23. u.ae, Insurance against job loss (Unemployment Insurance scheme), updated 8 Dec 2025. https://u.ae/en/information-and-services/jobs/Workplace-regulations/insurance/unemployment-insurance-scheme
  24. u.ae, Insurance scheme for workers and domestic workers (Ministerial Resolution No. 318 of 2022), updated 7 Aug 2025. https://u.ae/en/information-and-services/jobs/Workplace-regulations/insurance/insurance-system-for-employees-in-the-private-sector
  25. MoHRE, Ministerial Resolution No. (0340) of 2026 Concerning the Wage Protection System, Articles 1, 2 and 8 and Annex 1, issued 12 May 2026, in force 1 June 2026. https://www.mohre.gov.ae/assets/download/9e530b2e/Ministerial%20Resolution%20No.%200340%20of%202026.pdf.aspx