Whether you are a business owner planning to expand to the UAE or a skilled worker looking for work there, knowing the hiring regulations is crucial to staying compliant and protecting your rights.
Work Permits
A UAE work permit is an official document allowing a foreign national to legally work in the UAE. An employer typically sponsors it and essentially acts as a “job licence,” permitting employees to live and work in the UAE. It is often called a “standard work visa” managed by the Ministry of Human Resources and Emiratisation (MoHRE).
Working Hours and Overtime
The UAE has a six-day workweek, with a typical workday lasting eight hours. However, this reduces to six hours per day during Ramadan. Also, employees are entitled to 45 days of paid sick leave per year.
Working hours
Usually, the time taken to commute to and from the workplace is not included in calculating the working hours, except for certain professions specified under the Executive Regulations of the Labour Law. Employees are entitled to one or more breaks of at least one hour for every five hours.
Overtime during regular workdays
In the UAE, any work beyond the time documented in the employment contract, such as on weekends or during public holidays, is considered overtime. All overtime has to be paid.
Overtime during working days
Overtime is typically capped at 2 hours per day and compensated at an increased rate, usually 25% extra for regular overtime and 50% extra for hours worked between 10 pm and 4 am.
Overtime during off days
When employees work during their off days, as specified in the employment contract or labour regulations, they are entitled to compensation in one of the following forms:
- A substitute rest day. OR
- Monetary compensation of regular wage plus 50% of the basic pay for each extra workday.
The chosen form of overtime compensation can be specified in the employment contract or decided and communicated when overtime is planned.
Minimum Wage
UAE Labour Laws do not define a minimum blanket wage for workers. They only mention that the salary must cover the employee’s basic needs. Employers negotiate the compensation with the hired workers when signing the employment contract.
Things to consider while negotiating salary
- Industry: Compensation in high-demand industries, such as healthcare, finance, and technology, tends to be higher than in other sectors.
- Employees’ skill level and education: The greater the expertise, the higher the salary.
- Geographical location: Dubai and Abu Dhabi salaries are the highest due to the higher cost of living.
- Employee experience: Highly experienced workers command higher remuneration for their expertise.
Wage protection laws in the UAE
- Salaries should be disbursed electronically, through authorised banks or financial institutions, and on time.
- There are upper limits on salary deductions to prevent employee exploitation.
- Fair and efficient mechanisms are in place to resolve wage disputes.
- All private-sector employers must register with the WPS and comply with its regulations.
Cost of living
The UAE is a cultural and technology hub. The cost of living varies across cities, according to the facilities available. For instance, living in Dubai or Abu Dhabi is more expensive than in Sharjah.
The cost of living, excluding rent, for one person is around AED 4,000 ($1,100), while that for a family of four is around AED 14,000 ($3,800) per month.
Vacation Allowance
The vacation allowance for the first year equals two days after six months of engagement with the employer. After one year, this changes to 30 days of annual leave. Leaves not taken can be carried forward to the following year or compensated for monetarily.
Termination
Under UAE Labour Law, employers can terminate employment contracts for legitimate reasons, and they must do this through documented (printed, written, email) communication. An employment contract is terminated if the specified period of employment is over and the contract is not renewed or extended.
Notice Period
The terminating party must serve the notice period. It can be between one and three months, as the employment contract specifies. During the notice period:
- Employees are entitled to a salary equal to their existing pay for the entire notice period.
- The employer is entitled to continued and quality work as per the existing responsibilities of the employee.
- If the employer terminates the contract, the employee is entitled to one day off per week throughout the notice period to look for alternate employment.
Any party that wishes to shorten the notice period or not serve it must compensate for it monetarily according to the last wage received by the employee.
How Access Financial Can Help
Access Financial supports individuals looking for work, as well as businesses, recruitment agencies, and contractors looking to hire in the UAE. Our services include contract management, EOR, payroll, and umbrella services. We specialise in mitigating tax liabilities, boosting take-home income, supporting immigration, and helping you comply with local labour laws.
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