Dubai has become one of the world’s leading destinations for business, trade, and employment. With thousands of new companies forming every year and a workforce made up largely of expatriates, Dubai has put in place a comprehensive set of employment regulations.
For employers, understanding and following these rules is not just a legal requirement but also essential for building a strong reputation, attracting top talent, and avoiding penalties. For employees, knowing their rights ensures they receive fair treatment and benefits.
This guide explains Dubai’s employment regulations in clear language, outlines employer and employee obligations, and shows practical steps to comply.
Understanding Dubai’s Employment Law
The main law regulating employment in Dubai’s private sector is the UAE Labour Law (Federal Decree Law No. 33 of 2021, amended 2023). It covers everything from employment contracts to working hours, leave entitlements, wages, and termination.
Some free zones, such as the DIFC, have their own employment regulations, but most private-sector workers in Dubai fall under the federal system.
Employers must also comply with rules issued by the Ministry of Human Resources and Emiratisation (MOHRE) and, for immigration and residency matters, the General Directorate of Residency and Foreigners Affairs (GDRFA).
Employment Contracts
Every employee in Dubai must have a formal written contract registered with MOHRE. The contract should clearly state:
- Job title and description
- Salary and benefits
- Working hours and leave entitlement
- Notice period and termination conditions
Contracts are usually bilingual (Arabic and English), with Arabic taking precedence in disputes. Dubai abolished unlimited contracts and now requires fixed-term contracts, which can be renewed.
How to comply:
Draft clear, bilingual contracts. Make sure they are registered with MOHRE before the employee starts work. Keep copies signed by both parties.
Probation Periods
Employers can place new hires on probation for up to six months. During this time, either party can end the contract with shorter notice than normal.
How to comply:
Clearly mention the probation period in the contract. Notify employees in writing if the contract is to be terminated during probation. Provide the legally required notice period.
Working Hours and Overtime
The standard working time is eight hours per day or 48 hours per week. During Ramadan, working hours are reduced by two hours each day. Any time worked beyond the standard hours is considered overtime and must be compensated.
How to comply:
Implement a timekeeping system to monitor hours. Pay overtime at the legally required premium rates. Update policies annually to reflect any law changes.
Leave Entitlements
Employees are entitled to:
- Annual leave: 30 calendar days after one year of service (pro-rated if less than a year).
- Sick leave: Up to 90 days per year (full pay for the first 15 days, half pay for the next 30 days, unpaid for the final 45 days).
- Maternity leave: 60 days (45 days at full pay, 15 days at half pay).
- Paternity leave: 5 working days.
- Public holidays: As announced by the government each year.
How to comply:
Maintain accurate leave records. Communicate leave policies in the employee handbook. Do not deduct salary unlawfully during statutory leave.
Wages and the Wage Protection System
Salaries must be paid on time through the Wage Protection System (WPS), which transfers wages electronically to employees’ bank accounts. This system protects workers and allows MOHRE to monitor compliance.
How to comply:
Register for the WPS and ensure all salaries go through it. Pay by the due date set in the contract. Maintain payroll records for at least several years in case of inspection.
End-of-Service Gratuity in Dubai
Under the UAE Labour Law, employees who have completed at least one year of continuous service are entitled to an end-of-service gratuity when their employment ends. This is a form of severance pay designed to reward employees for their service and is calculated on the basis of their last drawn basic salary and the total years of service.
- First 5 years of service: The employee is entitled to 21 days’ basic salary for each year of service.
- After 5 years of service: The entitlement increases to 30 days’ basic salary for every additional year worked beyond the first five years.
There are some nuances:
- Any unpaid leave taken by the employee is excluded from the gratuity calculation period.
- If an employee resigns before completing one year of service, they are not entitled to gratuity.
- For employees on fixed-term contracts, calculation differs slightly based on the contract completion.
How Employers Can Comply
To stay compliant and avoid disputes or penalties:
- Maintain Accurate Records: Keep detailed records of each employee’s start date, salary changes, and any unpaid leave to calculate gratuity precisely.
- Use Clear Formulas: Apply the exact statutory formula when calculating gratuity, do not include allowances or bonuses in “basic salary” unless contractually agreed.
- Timely Settlement: Pay the gratuity and all other final dues immediately upon termination or resignation as per UAE Labour Law.
- Inform Employees: Clearly state in employment contracts and HR policies how gratuity will be calculated and paid to enhance transparency.
Following these practices ensures smooth offboarding, builds trust with employees, and keeps your business aligned with Dubai’s labour compliance requirements.
Health, Safety and Non-Discrimination
Employers must provide a safe workplace, appropriate equipment, and training to prevent accidents. They are also prohibited from discriminating on the basis of gender, race, religion, nationality, or disability.
How to comply:
Conduct regular health and safety assessments. Have a written equal-opportunity policy. Train HR and managers on non-discrimination practices.
Penalties for Non-Compliance
Dubai imposes fines for late salary payments, hiring without proper permits, failing to provide leave or overtime pay, or miscalculating gratuity. Repeat violations can lead to business license suspension and bans on new work permits.
How to comply:
Audit your HR practices regularly. Keep documentation of all employment actions. Stay updated with MOHRE announcements.
Steps to Comply with Employment Regulations in Dubai
- Prepare clear bilingual employment contracts and register them with MOHRE.
- Sponsor work visas correctly through GDRFA.
- Pay salaries through the Wage Protection System on time.
- Monitor working hours and overtime.
- Maintain records of leave and absences.
- Provide safe working conditions and non-discriminatory policies.
- Calculate and pay end-of-service gratuity correctly.
- Keep up with updates to the labour law and free-zone regulations.
Common Mistakes to Avoid
- Using vague contracts or failing to register them.
- Paying salaries outside WPS or delaying payments.
- Ignoring overtime entitlements.
- Not updating policies to reflect maternity/paternity leave changes.
- Miscalculating gratuity.
- Forgetting to renew employee visas or work permits on time.
Why Compliance Matters for New Companies
For new businesses entering Dubai’s market, establishing good HR practices from day one saves time, money, and reputational risk. Compliant companies are more attractive to investors, partners, and skilled employees.
If you are setting up a business in Dubai and planning to hire staff, you must first register your company with MOHRE and GDRFA and obtain the necessary approvals. Without proper registration, you cannot issue work permits or visas.
To make this easier, see our detailed guide on LLC Formation in Dubai: Complete Registration Guide. It walks you through the process of forming a company, registering with MOHRE, and obtaining all required permits so you can hire legally from day one.
Tips for Employees
- Always insist on a written contract registered with MOHRE.
- Keep copies of your employment documents and salary slips.
- Know your leave entitlements and grievance procedures.
- If you face non-payment of wages or unfair treatment, you can file a complaint with MOHRE.
Final Thoughts
Dubai’s employment regulations are designed to balance the needs of employers and employees. They protect workers’ rights while ensuring businesses can operate efficiently and ethically.
For employers, compliance begins with proper company registration and continues through every stage of the employment relationship — from recruitment and contracts to salary payments and end-of-service benefits.
By understanding and following the law, you not only avoid penalties but also build a reputation as a responsible employer in one of the world’s most competitive markets.
Need expert guidance on setting up a company in Dubai or ensuring compliance with employment regulations? Ease to Compliance can assist you in navigating Dubai’s labour laws, company formation, and tax obligations.
Contact Ease to Compliance today to discuss your business requirements and get personalised support.
FAQs – Employment Regulations in Dubai
Q1. What penalties can a company face for late payment of wages in Dubai?
Answer: Companies may face fines, suspension of new work permits, and legal action if wages are not paid on time through the Wage Protection System.
Q2. Do Dubai’s employment regulations cover part-time workers?
Answer: Yes. MOHRE introduced a part-time work permit system, and such workers are entitled to specific benefits under the Labour Law.
Q3. How often should an employer update employment contracts?
Answer: Employers should update contracts whenever there’s a change in job role, salary, or benefits to ensure compliance with MOHRE’s records.
Q4. Do free zone companies in Dubai follow the same labour laws?
Answer: Free zones like DIFC and ADGM have their own employment regulations, but many areas mirror the UAE Labour Law. Employers should review the specific free zone’s rules in addition to federal laws.
