Business owners and companies that are operating and hiring staff in the UAE ought to know their obligations and responsibilities to their employees. Should you be working in the Emirates, it is in your best interests to be aware of and to understand the labour laws of the country and to ensure your employer is following and carrying these out.
UAE Labour Law is an employers or HR department’s go to reference for guidance and clarification regarding, but not limited to:
We strongly highlight to employers to know your responsibilities and employees know your rights. Here we take a closer look at some of the main features of UAE Labour Law for working in the private sector.
Working in the private sector, Federal Law No. 8 of 1980 Labour Law governs the labour rights of employees in the private sector. UAE Labour Law covers a series of job-related matters. Ministry of Human Resources and Emiratisation (MoHRE) is responsible for overseeing that employer-employee relations are met, being carried out and performed correctly.
Article 65 of the UAE Labour Law identifies the normal business working hours within the private sector which is set out as 8 hours per day or 48 hours per working week. Working hours can be increased to 9 hours per day for businesses once approval is received from MoHRE. Most business employees working a 9 hour day are within the hospitality, consultancy, and food and beverage industry.
The only entities not governed by Labour Law are Government entities where employees operate for 7 hours per working day.
Employees that are working in arduous, unhealthy working conditions and industries are also restricted to work for 7 hours per day and it is prohibited to work longer and over the 7 hours.
Within the private sector, during the month of Ramadan normal working hours are reduced by two hours daily.
Once an employee is requested to work beyond normal working hours this is considered as overtime. The employee is entitled to pay equal to normal working hours’ remuneration plus 25 per cent of that pay. It may increase to 50 per cent if overtime is completed between the time period of 9pm to 4am.
Officially the weekend starts on Friday and this typically applies to all workers, excluding those workers on daily wages. If it calls for an employee to work overtime during a Friday, the employee will be entitled for normal working hours’ pay and an increase of not less than 50% of that sum.
All employees are entitled for paid leave during the following 8 public holidays:
Each employee is entitled to annual leave and this typically applies as:
An employee might be approved special leave without pay, it may not exceed 30 days for the performance of Haj during their employment service. This may be granted only once in the course of their total years of employment.
During a period of employment an employee is able to take sick leave of not more than 90 days per year subject to conditions stipulated in the law. The sick employee will receive full pay for the first 15 days, half pay for the next 30 days and no pay for the rest 45 days.
Female employees are eligible to 45 full day’s pay for maternity leave so long as she has fulfilled at least one year’s employment service. Where an employee has not yet completed one year of service will be entitled to half pay for maternity leave. Furthermore, the female on maternity leave has the capacity to extend her leave at an unpaid rate for up to a maximum 10 days.
During the first 18 month following delivery of the baby, the female employee nursing their child is able to have two paid rest intervals per day, which do not exceed 30 minutes, in order to complete this task. Working fathers are not provided paternity leave under UAE Labour Law.
No employer or employee may bring or allow others to bring any kind of alcoholic drinks for consumption on work premises.
During the hot summer period and at the hottest time of the day construction and industrial workers are not permitted to work. Should a company enforce or have staff work during the designated break time they will be fined anywhere from AED 5,000 up to AED 50,000 per labour worker.
Currently there is no set minimum salary specified in the UAE Labour Law, however it does reference that salaries need to cover the basic needs of a company’s employees.
Article 63 of the law states that the minimum wage and cost of living index is determined either in general or for a particular area or a particular profession by virtue of a decree and consent of the Cabinet.
WPS is a key step to guarantee and safeguard the rights of workers, and to form trust between a company and its employees. Under WPS, the salaries of employees will be transferred to employee’s accounts in banks or financial institutions that are authorized by the Central Bank of the UAE to provide a service. Employees can contact MoHRE service eNetwasal for any concerns or complaints regarding their salary.
Should an employee resign of their free will before completing one year, they will not be entitled to any form of gratuity payment. Whereas, if an employee completes one year of continuous service and resigns, they are entitled to a gratuity for the services fraction of a year.
Working out the end of service gratuity is calculated on the base of the last wage that the employee was entitled to (the basic salary). Additional allowances such as: housing and transportation etc. is not included as it will be only the main basic salary. During the end of service calculation should an employee owe any money to the company/employer, the employer can automatically deduct the amount from an employee’s total gratuity payout.
Under a limited contract – calculations for gratuity will be as follows:
Under an unlimited contract – calculations for gratuity will be as follows:
In the event where the employee under an unlimited contract resigns, calculation will be as follows:
Employees that work in free zones are typically not governed by UAE Labour Law. Each Dubai, Abu Dhabi and North Emirates free zone (there are over 50 UAE free zones) has its own employment / labour law. Therefore, employees are subject to the regulations of their respective free zone authority.
Free zone employees are set out under a contract with the respective free zone authority. The conditions specified in the employment contract must be in accordance with the Labour Law. Free zone employees are sponsored by the respective free zone and not their employer and must comply to the respective free zone authority rules.
For more information regarding the laws that govern free zones click on the link Complying with labour laws to learn more.