UAE Labor Law 2026: The Complete Guide for HR Managers
Complete guide to UAE Labor Law 2026 covering employment contracts, working hours, leave entitlements, gratuity, termination rules, and WPS requirements.
What is UAE Labor Law 2026?
Quick Summary: UAE Labor Law 2026 is governed by Federal Decree-Law No. 33 of 2021, effective since February 2, 2022, and amended through 2024. Key provisions include: mandatory fixed-term contracts (unlimited contracts abolished), 8-hour workdays (48 hours/week), 30 days annual leave, 60 days maternity leave, gratuity based on 21-30 days per year of service, and compliance enforced through WPS with penalties up to AED 1 million per violation.
The UAE's employment landscape underwent a significant transformation when Federal Decree-Law No. 33 of 2021 Regarding the Regulation of Employment Relationship came into effect on February 2, 2022. This legislation replaced the previous Federal Law No. 8 of 1980 and introduced modern employment standards aligned with international best practices.
The law applies to all employers and employees in the UAE private sector, including UAE nationals and expatriates. It has been subsequently amended by FDL 14/2022, FDL 20/2023, and most recently FDL 9/2024, which introduced significantly increased penalties for non-compliance.
This guide covers everything HR managers and business owners need to know about UAE labor law compliance in 2026.
Employment Contracts: Fixed-Term Only
The End of Unlimited Contracts
One of the most significant changes introduced by the 2021 law was the abolition of unlimited employment contracts. Under Article 8, all employment relationships in the UAE private sector must now be governed by fixed-term contracts.
Key contract requirements:
| Requirement | Specification |
|---|---|
| Contract type | Fixed-term only |
| Written contract | Mandatory |
| Registration | Must be registered with MOHRE |
| Language | Arabic required (translations allowed) |
| Renewal | Automatic if both parties continue working |
Contract Duration
While the original Article 8(3) specified a maximum term of three years, MoHRE clarified in October 2022 that contracts must specify a definite term but there is no statutory cap on duration. In practice, most contracts are issued for 2-3 years.
Automatic renewal: If both parties continue to implement the contract after its expiry without signing a new agreement, the original contract is treated as extended under the same conditions.
Contract conversion deadline: Any pre-existing unlimited contracts should have been converted to fixed-term contracts by December 2025 under MOHRE guidelines.
Work Models Recognized Under UAE Law
The 2021 law formally recognized diverse work arrangements for the first time:
- Full-time: Standard 8-hour day, single employer
- Part-time: Fewer hours, can work for multiple employers
- Temporary: Project-based or seasonal work
- Flexible: Variable hours based on workload
- Remote work: Work from home or outside traditional workplace
- Job-sharing: Multiple employees share one role
Each model has specific contract requirements and benefits calculations. Part-time employees receive pro-rata benefits, including gratuity calculated proportionally to hours worked.
Working Hours and Overtime
Standard Working Hours
Under Article 17 of Federal Decree-Law No. 33 of 2021, private sector working hours are:
| Aspect | Requirement |
|---|---|
| Daily maximum | 8 hours |
| Weekly maximum | 48 hours |
| Work week options | 5 or 6 days |
| Maximum consecutive hours | 5 hours without break |
| Break time | Not counted as working hours |
Special sectors: Hotels, cafes, security services, and retail may operate 9-hour workdays with MOHRE approval.
Ramadan Working Hours
Working hours are reduced by 2 hours daily during Ramadan under Cabinet Resolution No. 1 of 2022. This reduction:
- Applies to all employees regardless of religion
- Is mandatory, not discretionary
- Reduces the standard day to 6 hours
- Affects overtime calculations
For detailed Ramadan guidance, see our UAE Ramadan Working Hours 2026 guide.
Overtime Regulations
Employers may require employees to work overtime, but Article 19 sets clear limits and compensation requirements:
Overtime limits:
- Maximum 2 additional hours per day
- Total hours cannot exceed 144 over any 3-week period
Overtime compensation rates:
| Type of Overtime | Minimum Rate |
|---|---|
| Daytime (after 8 hours) | Basic hourly wage + 25% |
| Night (9 PM - 4 AM) | Basic hourly wage + 50% |
| Rest day work | Basic wage + 50% OR compensatory day |
Example calculation:
Employee with AED 6,000 basic monthly salary works 2 overtime hours during the day:
- Hourly rate: AED 6,000 ÷ 30 days ÷ 8 hours = AED 25
- Overtime rate: AED 25 × 1.25 = AED 31.25/hour
- Total overtime pay: AED 31.25 × 2 = AED 62.50
Leave Entitlements
Annual Leave
Under Article 29 of the labor law, annual leave entitlements are:
| Service Period | Entitlement |
|---|---|
| Less than 6 months | No entitlement |
| 6 months to 1 year | 2 days per month worked |
| 1+ years | 30 calendar days |
Important rules:
- Leave must be taken within 2 years of accrual
- Employers cannot deny accumulated leave beyond 2 years
- Part-time employees receive proportional leave based on hours worked
- Public holidays falling during annual leave are added back
Sick Leave
Employees are entitled to sick leave after completing their probationary period under Article 31:
| Period | Payment |
|---|---|
| First 15 days | Full pay (100%) |
| Next 30 days | Half pay (50%) |
| Following 45 days | Unpaid (0%) |
| After 90 days total | Employer may terminate |
Requirements:
- Medical certificate from a licensed facility
- Certificate submitted within 48 hours of absence
- No sick leave during probation period
Maternity Leave
Under Article 30, female employees in the private sector receive:
| Period | Payment |
|---|---|
| First 45 days | Full pay (100%) |
| Next 15 days | Half pay (50%) |
| Total | 60 calendar days |
Key provisions:
- No minimum service requirement—available from day one
- Additional 30 days fully paid if child has illness or disability (with medical certificate)
- Can be extended by another 30 days unpaid
- Government sector employees receive 90 days
Parental Leave
The UAE was the first Arab country to mandate paternity leave for private sector employees:
- Duration: 5 working days
- Timing: Can be taken consecutively or intermittently within 6 months of birth
- Eligibility: Both mothers and fathers with a live-born child
- Payment: Fully paid
Other Leave Types
| Leave Type | Duration | Notes |
|---|---|---|
| Bereavement (spouse/parent/child/sibling) | 5 days paid | — |
| Bereavement (grandparent/grandchild) | 3 days paid | — |
| Hajj | Up to 30 days unpaid | Once during employment |
| Study leave (UAE employees) | 10 days per year | For approved education |
End of Service Gratuity
Eligibility and Calculation
End-of-service gratuity is governed by Article 51 of the labor law. Employees who complete at least one year of continuous service are entitled to gratuity upon termination.
Gratuity calculation formula:
| Service Period | Calculation |
|---|---|
| Years 1-5 | 21 days' basic salary × years worked |
| Years 6+ | 30 days' basic salary × additional years |
| Maximum | Capped at 2 years' total remuneration |
Important notes:
- Calculated on basic salary only (excludes allowances, bonuses, commissions)
- Days of unpaid absence are excluded from service calculation
- Under the 2021 law, resignation and termination receive the same gratuity (old reduction rules abolished)
Example calculation:
Employee with AED 10,000 basic salary after 7 years:
- Years 1-5: (10,000 ÷ 30) × 21 × 5 = AED 35,000
- Years 6-7: (10,000 ÷ 30) × 30 × 2 = AED 20,000
- Total gratuity: AED 55,000
For detailed calculations, use our UAE Gratuity Calculator or read the complete gratuity guide.
Alternative Savings Scheme
Cabinet Resolution No. 96 of 2023 introduced a voluntary Alternative End-of-Service Benefits Scheme:
| Service Period | Employer Contribution |
|---|---|
| Under 5 years | 5.83% of basic salary monthly |
| Over 5 years | 8.33% of basic salary monthly |
Funds are invested through approved investment funds regulated by the Securities and Commodities Authority. Participation is voluntary for employers and selected employees as of 2026.
Payment Timeline
Employers must pay all outstanding wages, entitlements, and gratuity within 14 days of contract termination. Under 2024 amendments, employers face fines up to AED 1,000,000 for non-payment.
Probation Period
Duration and Rules
Under Article 9, the probation period:
| Aspect | Requirement |
|---|---|
| Maximum duration | 6 months |
| Extension | Not permitted |
| Renewal | Not permitted |
| Same employer | Cannot serve probation twice for same role |
Termination During Probation
Employer terminating employee:
- 14 days' written notice required
Employee moving to another UAE job:
- 1 month written notice required
- New employer must compensate current employer for recruitment costs (unless otherwise agreed)
Employee leaving UAE:
- 14 days' written notice required
- Failure to serve notice: No work permit for 1 year from departure date
Employee Rights During Probation
- Full salary from day one
- Same workplace protections as permanent employees
- Entitled to reduced Ramadan hours
- Not entitled to sick leave until probation ends
Termination and Notice Periods
Minimum Notice Period
Under Article 43, the minimum notice period is 30 calendar days for both resignations and terminations. This applies to:
- All contract types
- All job levels
- Both employer and employee-initiated termination
Notice period ranges: Contracts typically specify 30-90 days. Periods significantly longer than 90 days may be challenged as unreasonable.
Compensation for Unserved Notice
If either party chooses not to serve the full notice period, they must compensate the other with pay equal to the unserved duration.
Termination Without Notice (Article 44)
Employers can terminate immediately without notice for serious misconduct, including:
- Forging identity or submitting false documents
- Causing substantial financial loss due to misconduct
- Violating workplace safety rules despite warnings
- Assaulting employer, manager, or colleagues
- Being absent 20+ non-consecutive days or 7+ consecutive days without valid reason
- Disclosing confidential business information
- Being convicted of a crime involving dishonesty
Important: Employers must notify MOHRE within 7 working days of the incident. Under the new law, gratuity is not automatically forfeited—employers must obtain a court ruling to withhold it.
Arbitrary Dismissal
If an employee believes they were unlawfully terminated:
- File complaint with MOHRE
- MOHRE attempts mediation within 14 days
- If unresolved, case referred to court
Compensation for unlawful termination is capped at 3 months' wages based on the last salary received.
Wage Protection System (WPS)
What is WPS?
The Wage Protection System is the UAE government's mandatory electronic salary transfer system, launched in 2009. All private sector employers registered with MOHRE must pay salaries through approved banks or exchange houses.
Payment Deadlines
| Milestone | Requirement |
|---|---|
| Wages due | First day of month following pay period |
| Grace period | 15 days from due date |
| Late payment | After 15 days from due date |
WPS Registration Requirements
- Open corporate account with approved WPS agent
- Submit Salary Information File (SIF) monthly
- Add new employees within 30 days of hire
- Ensure SIF details match employment contracts
2026 WPS Updates
Emirati minimum wage enforcement:
- From January 1, 2026: AED 6,000/month minimum for Emiratis
- Deadline to update existing contracts: June 30, 2026
- After July 1, 2026: Non-compliant employers face work permit suspensions
For comprehensive WPS guidance, see our UAE WPS Compliance Guide 2026.
2024-2026 Amendments and Penalties
August 2024 Penalty Increases
Federal Decree-Law No. 9/2024, effective August 31, 2024, significantly increased fines for labor law violations:
| Violation | Previous Fine | New Fine (2024+) |
|---|---|---|
| Hiring without permits | AED 50,000-200,000 | AED 100,000-1,000,000 |
| Fictitious employment | — | AED 100,000-1,000,000 |
| Failing to settle worker rights | AED 50,000-200,000 | AED 100,000-1,000,000 |
| Work permit misuse | AED 50,000-200,000 | AED 100,000-1,000,000 |
Penalty multipliers: Fines are multiplied by the number of workers affected, up to a maximum of AED 10 million.
Fictitious Emiratisation
Companies found engaging in fictitious Emiratisation face:
- Fines of AED 100,000-1,000,000
- Mandatory reimbursement of government incentives
- Criminal proceedings initiated by MOHRE
- Settlement option: Pay 50% of fine + return incentives before court
Emiratisation Requirements
Companies with 50+ employees must meet hiring quotas:
| Year | Requirement | Penalty for Non-Compliance |
|---|---|---|
| 2024 | 1 Emirati hired | AED 96,000 annual fine |
| 2025 | 2 Emiratis hired | AED 108,000 annual fine |
For detailed Emiratisation guidance, see our Emiratization 2026 Compliance Guide.
Extended Statute of Limitations
The 2024 amendments extended the limitation period for labor claims from 1 year to 2 years from the date the cause of action arises.
Salary Continuation During Disputes
MOHRE now mandates employers to continue paying employees for up to 2 months while disputes are being resolved. If disputes aren't resolved within 14 days, MOHRE refers the case to court.
Employer Obligations Summary
Mandatory Policies (50+ Employees)
Companies with 50 or more employees must have:
- Grievance and disciplinary sanctions policies
- Written procedures for handling complaints
- Clear escalation paths
Prohibited Practices
Under the labor law, employers must not:
- Engage in forced labor
- Discriminate based on gender, race, color, sex, religion, national origin, social origin, or disability
- Subject employees to harassment, bullying, physical violence, or psychological abuse
- Retain employee identity documents
- Withhold wages beyond legal limits
Currency Flexibility
The 2024 amendments allow salary payments in currencies other than AED, provided this is agreed in writing between employer and employee.
How RadixHR Helps with UAE Labor Law Compliance
Managing compliance with UAE labor law requires tracking dozens of requirements across contracts, working hours, leave, payroll, and reporting. RadixHR automates this complexity:
Contract Management:
- Fixed-term contract templates aligned with MOHRE requirements
- Automatic renewal tracking and notifications
- Digital contract storage and retrieval
Time and Attendance:
- 8-hour/48-hour tracking with automatic alerts
- Ramadan working hours configuration
- Overtime calculation per Article 19 rates
Leave Management:
- Automatic accrual calculations for all leave types
- Maternity, paternity, and bereavement leave tracking
- Leave balance visibility for employees and managers
Payroll and WPS:
- Automated SIF file generation
- WPS compliance monitoring
- Gratuity provisioning and calculation
Compliance Alerts:
- Contract expiry reminders
- Probation period tracking
- Regulatory update notifications
Frequently Asked Questions
What is the main UAE labor law governing private sector employment?
Federal Decree-Law No. 33 of 2021 Regarding the Regulation of Employment Relationship is the primary legislation governing private sector employment in the UAE. It came into effect on February 2, 2022, and has been amended by FDL 14/2022, FDL 20/2023, and FDL 9/2024.
Are unlimited contracts still valid in UAE 2026?
No. The 2021 labor law abolished unlimited contracts. All employment contracts must be fixed-term. Any pre-existing unlimited contracts should have been converted to fixed-term contracts by December 2025 under MOHRE guidelines.
What are the standard working hours in UAE?
Standard working hours are 8 hours per day or 48 hours per week under Article 17 of Federal Decree-Law No. 33 of 2021. During Ramadan, working hours are reduced by 2 hours daily for all employees. Some sectors like hospitality may work up to 9 hours with MOHRE approval.
How much annual leave are UAE employees entitled to?
Employees who complete one year of service are entitled to 30 calendar days of paid annual leave. Those with 6-12 months of service receive 2 days per month worked. Employers cannot deny use of accrued leave for more than two years.
What is the maternity leave entitlement in UAE private sector?
Female employees in the UAE private sector are entitled to 60 calendar days of maternity leave: the first 45 days at full pay and the remaining 15 days at half pay. This applies from day one of employment with no minimum service requirement.
How is end of service gratuity calculated in UAE?
Gratuity is calculated on basic salary only: 21 days' pay for each of the first 5 years of service, plus 30 days' pay for each additional year. The total is capped at 2 years' remuneration. Employees must complete at least 1 year of service to be eligible.
What is the minimum notice period for termination in UAE?
The minimum notice period is 30 calendar days under Article 43 of Federal Decree-Law No. 33 of 2021. This applies to both resignations and terminations. Notice periods typically range from 30 to 90 days depending on the employment contract.
What are the penalties for UAE labor law violations in 2026?
As of August 2024 amendments, fines range from AED 100,000 to AED 1 million for serious violations like hiring without permits, fictitious employment, or failing to settle worker rights. Penalties are multiplied by the number of workers affected, up to AED 10 million maximum.
What is the maximum probation period allowed in UAE?
The maximum probation period is 6 months under UAE labor law. It cannot be extended or renewed. If the employer wants to terminate during probation, they must give 14 days' written notice. Employees changing jobs within UAE must give 1 month notice.
Is the Wage Protection System mandatory for all UAE employers?
Yes, WPS is mandatory for all private sector companies registered with MOHRE. Employers must pay salaries through approved banks or exchange houses. Salaries are due within 15 days after the end of the pay period. Non-compliance results in fines, work permit suspensions, and potential business closure.
Summary: UAE Labor Law 2026 Key Requirements
| Aspect | Requirement | Legal Reference |
|---|---|---|
| Primary legislation | Federal Decree-Law No. 33 of 2021 | Effective Feb 2, 2022 |
| Contract type | Fixed-term only (unlimited abolished) | Article 8 |
| Working hours | 8 hours/day, 48 hours/week | Article 17 |
| Ramadan hours | 6 hours/day (2-hour reduction) | Cabinet Resolution 1/2022 |
| Overtime (day) | Basic wage + 25% minimum | Article 19 |
| Overtime (night) | Basic wage + 50% minimum | Article 19 |
| Annual leave | 30 days (after 1 year) | Article 29 |
| Sick leave | 90 days (15 full + 30 half + 45 unpaid) | Article 31 |
| Maternity leave | 60 days (45 full + 15 half pay) | Article 30 |
| Parental leave | 5 working days | Article 32 |
| Probation max | 6 months (non-renewable) | Article 9 |
| Notice period min | 30 calendar days | Article 43 |
| Gratuity (1-5 years) | 21 days' basic salary/year | Article 51 |
| Gratuity (5+ years) | 30 days' basic salary/year | Article 51 |
| Gratuity cap | 2 years' total remuneration | Article 51 |
| Payment deadline | 14 days from termination | — |
| Violation fines | AED 100,000-1,000,000 | FDL 9/2024 |
| Max aggregate fine | AED 10,000,000 | FDL 9/2024 |
Sources and References
Primary Legislation
-
Federal Decree-Law No. 33 of 2021 Regarding the Regulation of Employment Relationship
-
Cabinet Resolution No. 1 of 2022 - Executive Regulations
-
Federal Decree-Law No. 9 of 2024 - Penalty Amendments
- Effective August 31, 2024
Government Resources
-
Ministry of Human Resources and Emiratisation (MOHRE)
-
UAE Government Official Portal
-
Central Bank of UAE
Related Resources
- UAE Ramadan Working Hours 2026
- UAE WPS Compliance Guide 2026
- UAE Gratuity Calculator Guide 2026
- Emiratization 2026 Compliance Guide
- UAE Public Holidays 2026
- Gratuity Calculator Tool
Last updated: February 11, 2026. This guide is for informational purposes only and does not constitute legal advice. For specific situations, consult with qualified legal professionals or contact MOHRE directly.
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