UAE Labour Law Overview: Rights, Contracts & Key Rules in 2026

The UAE employs millions of expatriate workers across industries ranging from financial services to construction, hospitality, and technology. Understanding UAE employment law is essential for both workers planning their careers and employers managing their workforce — particularly around contract terms, leave entitlements, termination rules, and gratuity.

This overview covers the key provisions of Federal Decree-Law No. 33 of 2021 Regarding the Regulation of Employment Relationship — the current private-sector labour law in force since February 2022 — including contract types, working hours, leave rights, termination rules, the Wage Protection System, and MoHRE dispute resolution.

For end-of-service gratuity specifics, see the UAE Gratuity Guide and the UAE Final Settlement Calculator.

Federal Decree-Law No. 33 of 2021 made a significant structural change to UAE employment contracts: all new private-sector employment contracts must be fixed-term. Unlimited-duration contracts — which were the default under the old Federal Law No. 8 of 1980 — are no longer issued for new employment relationships.

Fixed-term contracts under the current law:

• Maximum initial term: 3 years (renewable)
• Renewals can be for any agreed period, including another 3 years or shorter terms
• If the contract expires and the employment continues without a new agreement, the contract is automatically renewed on the same terms for the same original duration, or for one year — whichever is shorter
• Service accumulated under previous unlimited contracts transfers and counts toward gratuity under the new law

Unlimited contracts in the transition: employers were required to convert existing unlimited-contract employees to fixed-term contracts by 1 February 2023. Workers who were on unlimited contracts before the new law retain their accrued entitlements; the conversion to a fixed-term contract does not reset gratuity service.

Part-time contracts: the new law formally recognizes part-time employment. Part-time workers accrue entitlements (including leave and gratuity) on a pro-rata basis relative to full-time hours.

Remote work contracts: the law also recognizes remote and flexible work arrangements as formal contract types, reflecting the post-pandemic workforce reality.

Employment contracts must be in Arabic (the legally binding version) and may have a translation. The contract must state salary, job title, work location, working hours, contract duration, notice period, and other prescribed elements.

The maximum permitted probation period under Federal Decree-Law No. 33 of 2021 is 6 months. Key probation rules:

Termination during probation by employer:

• 14 calendar days' written notice is required
• No end-of-service gratuity is payable for separations during probation
• Any accrued unused leave may still be due

Resignation during probation by worker:

• If the worker is leaving the UAE: 1 month's notice required
• If the worker is joining another UAE employer: 1 month's notice required; the new employer must pay compensation equal to the notice period wages to the previous employer
• If the worker resigns during probation, joins another UAE employer, and that employer does not pay the required compensation, MoHRE may refuse new work permit applications
• Workers who resign during probation without joining another UAE employer within 3 months may face a 1-year ban on obtaining a new UAE work permit

Service during probation counts toward continuous service if the worker passes probation — it is included in the total service period for gratuity purposes.

Standard working hours (Article 17):

• Maximum: 8 hours per day or 48 hours per week
• Certain sectors (hospitality, guards, domestic workers) may have regulated exceptions through ministerial resolution
• During Ramadan: working hours are reduced by 2 hours per day for Muslim workers (commonly applied to all workers in practice, depending on employer policy)

Overtime pay rules:

• Overtime beyond 8 hours per day (or 48 hours per week) must be compensated at at least 125% of the standard hourly wage
• Overtime worked between 10 PM and 4 AM must be compensated at at least 150% of the standard hourly wage
• Friday is the designated weekly rest day (or any other agreed day). Work on the rest day must be compensated at 150% minimum or compensated with a substitute rest day
• Maximum permitted overtime: 2 additional hours per day (with exceptions in emergency situations)

Rest periods: workers are entitled to at least one uninterrupted rest period during the working day (typically 1 hour for 8-hour shifts), which is not counted as working time.

Public holidays: the UAE government announces annual public holidays. Work performed on public holidays is compensated at 150% of the regular daily wage, or the worker is given a substitute day off.

Annual leave (Article 29):

• 30 calendar days per year after completing 1 year of continuous service
• Pro-rata annual leave is due for workers who have completed 6 months but less than 1 year
• The employer may set the leave schedule; workers cannot be denied leave indefinitely
• Unused annual leave at separation is encashed at the basic daily wage rate (basic salary ÷ 30 per day)
• Public holidays falling within annual leave are counted as part of the leave period unless the contract is more favorable to the worker

Sick leave (Article 31):

• After completing the probation period, workers are entitled to sick leave
• First 15 days: 100% pay
• Next 30 days: 50% pay
• Subsequent sick leave (up to 45 days further): unpaid — days of unpaid sick leave may reduce gratuity-eligible service
• Medical certificate from an approved health facility is required

Maternity leave (Article 30):

• 60 calendar days total maternity leave
• First 45 days: full pay
• Next 15 days: half pay
• An additional 45 days of unpaid leave may be taken if the mother or child suffers illness connected to the birth (medical certificate required)
• Workers who have been employed for less than 1 year are also entitled to maternity leave under these provisions

Paternity leave: 5 days within the first 6 months of the child's birth, for workers who have completed 1 year of service.

Bereavement leave: 5 days for death of a spouse; 3 days for death of a parent, child, sibling, grandchild, or grandparent.

Study leave: workers who have been employed for 2 years may be entitled to study leave for approved educational purposes. Terms vary by employer and ministerial resolution.

Hajj leave: workers who have been employed for more than 2 years may be entitled to unpaid Hajj leave once during their employment.

Legitimate grounds for termination by employer (Article 44):

• Business closure, downsizing, or restructuring
• Worker's incapacity to perform the role after reasonable accommodation
• Expiry of a fixed-term contract without renewal
• Misconduct — but only the specific categories listed in Article 44 allow immediate termination without notice; less serious misconduct requires notice

Immediate termination without notice (Article 44 — listed grounds only):

• Worker assumes a false identity or submits forged documents
• Worker causes intentional material loss to the employer
• Worker violates safety rules causing death or serious injury
• Worker discloses confidential information causing material harm
• Worker is convicted of a crime involving honor or honesty
• Worker is intoxicated or under the influence of illegal substances at work
• Worker physically assaults the employer, management, or a colleague at work
• Worker is absent without valid reason for more than 20 days in a year or 7 consecutive days

Arbitrary dismissal (Article 47): if an employer terminates a worker without a legitimate reason under the law, or the termination is found to be arbitrary, the worker is entitled to compensation of up to 3 months' wage in addition to all other entitlements. This is determined by MoHRE mediation or the courts.

Notice period rules:

• Contractually agreed notice period: between 30 and 90 days (legally mandatory range)
• Either party may pay the other compensation in lieu of serving notice — the compensation equals the notice period wages at the last total wage rate
• During the notice period, the worker is entitled to 8 paid hours per week to search for alternative employment

For the financial impact of different separation scenarios, use the UAE Final Settlement Calculator which models notice pay in both directions.

The Wage Protection System (WPS) is a mandatory electronic salary transfer framework requiring all UAE private-sector employers to pay wages via registered banks or exchange houses on a schedule set by MoHRE.

Key WPS rules:

• All wages must be paid on time through WPS — typically within the first week of each month for monthly-paid workers, or on the agreed cycle
• MoHRE monitors salary payment compliance in real time through the WPS data feed
• Employers who fail to pay wages on time face suspension of new work permit applications — meaning they cannot hire new staff until the violation is resolved
• Repeated or severe non-payment can result in additional penalties, including fines and referral to the Public Prosecution

Why WPS matters for workers:

• WPS creates a documented salary history that is invaluable in any dispute about total wages paid — critical for notice pay calculations and proving salary arrears
• Workers can report non-payment of wages through MoHRE channels; WPS records provide objective evidence that supports complaints
• Workers planning exit should obtain their WPS payment history — most banks provide this through internet banking statements — before settling any dispute

WPS and domestic workers: domestic workers (housemaids, nannies, drivers) are covered by a separate domestic worker law (Federal Decree-Law No. 9 of 2022) and a different WPS registration framework managed through the Ministry of Interior.

Federal Decree-Law No. 33 of 2021 introduced several worker protections that were absent or weaker in the previous law:

Anti-discrimination (Article 4): employers must not discriminate on the basis of race, color, sex, religion, national origin, or social origin in hiring, employment terms, promotion, or termination. Wage discrimination for the same work is also prohibited.

Anti-harassment (Article 14): workers have the right to a workplace free from harassment, bullying, and verbal, physical, or sexual abuse. Employers must take action on complaints.

Equal pay for equal work: women are entitled to the same wage as men for equivalent work. Maternity leave may not be counted against a worker's performance record or used as a reason for termination.

No confiscation of documents: employers are explicitly prohibited from confiscating passports or other personal documents. This prohibition has existed in UAE law but was reinforced in the new legislation.

Retaliation prohibition: employers cannot terminate or penalize workers for filing a complaint with MoHRE or a court, or for assisting another worker in filing such a complaint.

Non-compete clauses: non-compete clauses in employment contracts are permitted but are limited in scope. They must specify duration (maximum 2 years), geographic scope, and the type of work restricted. Courts can void unreasonably broad non-compete clauses.

No income tax: the UAE imposes no personal income tax on salaries, wages, or gratuity. This applies equally to UAE nationals and expatriates for employment income earned in the UAE.

The Ministry of Human Resources and Emiratisation (MoHRE) is the primary enforcement and dispute resolution authority for private-sector employment in the UAE mainland. DIFC and ADGM have their own courts and tribunals.

MoHRE complaint process:

• File a complaint through the MoHRE app, website, or in person at a MoHRE service center
• MoHRE contacts both parties and attempts mediated settlement within 2 weeks
• If mediation fails, MoHRE refers the case to the Labor Court automatically (no separate filing required by the worker)
• Workers earning below AED 20,000 per month receive free legal representation through the MoHRE process
• The process is free for workers — no court filing fee is charged when MoHRE refers the case

Time limits: employment claims generally have a 1-year limitation period from the date the right became due. Workers who leave the UAE without filing can still file a claim remotely, but evidence gathering becomes harder.

Common dispute categories:

• Unpaid wages or late payment of WPS salary
• Gratuity non-payment or underpayment at exit
• Wrongful termination or arbitrary dismissal claims
• Annual leave encashment disputes
• Notice period disputes (who owes whom)
• Contract terms disputes (job description, location, salary changes)

Documentation to gather before filing:

• Employment contract (Arabic version and any translation)
• WPS salary payment records
• Leave balance records from HR
• Any written communications about the separation (emails, WhatsApp if authenticated)
• Offer letter and any amendments to contract terms

Before filing, use the UAE Final Settlement Calculator to produce a documented estimate of what you believe you are owed — this helps frame the dispute clearly in mediation.

Tools to support UAE employment planning and exit:

• UAE Gratuity and Final Settlement Calculator — full exit calculation: gratuity, leave encashment, notice pay, deductions, net settlement
• Currency Converter — convert AED salary or settlement figures to GBP, INR, USD, EUR, PHP, or any currency
• Salary Calculator — break down gross salary into basic and allowance components
• VAT Calculator — UAE 5% VAT on goods and services for SME or business planning

For a deep dive on the gratuity formula, worked examples, and DIFC/free zone differences, see the UAE Gratuity Guide.