UAE Employment Law: What Employers and Workers Must Know

If you're working in the UAE — or paying people who do — the rules changed more than most people realise. Federal Decree-Law No. 33 of 2021 wiped the old 1980 labour law off the books in February 2022, and the practical fallout is still landing on my desk every week.

Quick answer

UAE employment law for the private sector mainland sits under Federal Decree-Law No. 33 of 2021 and its executive regulations, enforced by the Ministry of Human Resources and Emiratisation (MOHRE — the federal labour regulator). Unlimited contracts are gone. Every private-sector employee must be on a fixed-term contract, paid through the Wages Protection System (WPS), and given an end-of-service gratuity calculated on basic salary. DIFC and ADGM free zones run their own employment laws. Get the contract type, working hours, and termination grounds right, or you'll pay for it later.

The law that actually applies to you

Three regimes run in parallel, and people mix them up constantly.

Mainland and most free zones (JAFZA, DMCC, DAFZA, etc.) fall under Federal Decree-Law No. 33 of 2021 on the Regulation of Labour Relations, plus Cabinet Resolution No. 1 of 2022. This is what MOHRE enforces.

The Dubai International Financial Centre runs DIFC Employment Law No. 2 of 2019 (as amended by DIFC Law No. 4 of 2020 and the 2021 amendments). Abu Dhabi Global Market applies its own ADGM Employment Regulations 2024, which replaced the 2019 version on 1 April 2025. Different notice periods, different gratuity mechanics, different courts.

Federal government employees? Different law again — Federal Decree-Law No. 49 of 2022 on Human Resources in the Federal Government.

So before anyone quotes you a rule, ask which regime. Honestly, half the WhatsApp advice floating around Dubai is mainland rules being applied to DIFC contracts, or vice versa. It's wrong about half the time.

Contracts, probation, and the death of the unlimited contract

Under the old 1980 law, you had two contract types: limited and unlimited. The unlimited contract is gone. Since 2 February 2022, every private-sector employee on the mainland must be on a fixed-term contract, originally capped at three years and now renewable for any period the parties agree (the three-year cap was removed by Federal Decree-Law No. 20 of 2023).

Probation is capped at six months. During probation, the employer must give 14 days' written notice to terminate. If the employee wants to leave for another UAE employer, they owe one month's notice and the new employer compensates the old one for recruitment costs (Article 9). If they're leaving the UAE entirely, 14 days' notice — but if they come back within three months, the new employer pays compensation. Most clients get this wrong.

Notice after probation: minimum 30 days, maximum 90 days, and it has to be the same for both sides.

Watch out: Old unlimited contracts that existed before February 2022 were given until 31 December 2023 to be converted to fixed-term. If yours wasn't converted, you've been operating outside the law. Fix it before MOHRE finds out.

Wages, WPS, and end-of-service gratuity

Salaries on the mainland must be paid through WPS — the Wages Protection System run by the Central Bank and MOHRE — within 15 days of the due date. Miss this and the fines escalate fast: AED 1,000 per worker after 17 days late, plus blocks on new work permits after 60 days. Repeat offenders get referred for prosecution.

End-of-service gratuity (Article 51) works like this for full-time employees:

• 21 days' basic wage per year for the first five years
• 30 days' basic wage per year after five years
• Capped at two years' total wages

Note the word basic. Allowances — housing, transport, schooling — don't count toward gratuity. I've watched clients lose six-figure arguments because they assumed gratuity ran on total package. It doesn't.

Part-time, temporary, and flexible workers under the 2022 law accrue gratuity pro-rated against their actual hours versus a full-time equivalent.

In DIFC, gratuity was replaced in February 2020 by the DEWS scheme (DIFC Employee Workplace Savings) — a funded pension-style contribution of 5.83% of monthly basic wage for the first five years and 8.33% after. ADGM has a similar mandatory savings scheme since 2023.

Termination, arbitrary dismissal, and what you can actually claim

This is where most disputes land.

Lawful termination on the mainland needs a valid reason and proper notice — or, in narrow cases under Article 44, immediate dismissal without notice or gratuity (assault on the employer, gross misconduct, repeated unjustified absence over 20 days a year, etc.). The list is exhaustive. If your reason isn't in Article 44, you can't fire without notice.

Arbitrary dismissal under Article 47 entitles the employee to up to three months' total wages as compensation, on top of gratuity, notice pay, and unused leave. The labour court decides the quantum.

If the employee resigns because the employer breached the contract — non-payment of wages for over 60 days, assault, dangerous working conditions — that's treated as employer-initiated termination and the employee keeps full entitlements (Article 45).

Costs to know (2024-2025): MOHRE complaint filing is free. Labour court filings under AED 100,000 are exempt from court fees (Article 54). Above that, fees apply on a sliding scale. Most labour cases reach a first-instance judgment within 3-5 months in Dubai; longer in Abu Dhabi.

Filing window: you have one year from the date the entitlement became due to bring a labour claim. Miss it and the claim is statute-barred. I've seen this kill otherwise winnable cases more times than I'd like.

For more on related civil claims and procedure, see our /categories/civil section.

Working hours, leave, and the bits people forget

Standard hours: 8 per day or 48 per week. Ramadan: reduced by 2 hours daily for Muslim employees (and in practice, most employers extend this to all staff — not legally required but standard). Overtime is paid at 125% of basic hourly rate, or 150% between 9pm and 4am.

Annual leave: 30 calendar days after one year of service, 2 days per month between six months and one year.

Sick leave (Article 31): up to 90 days per year — first 15 fully paid, next 30 at half pay, the remaining 45 unpaid. Employers can't terminate during sick leave, but can terminate at the end of it if the employee can't return.

Maternity leave: 60 days total — 45 fully paid, 15 at half pay. An additional 45 unpaid days are available if the mother has a pregnancy-related illness, supported by medical evidence. Parental leave (for both parents): 5 working days within the first six months after birth.

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

Worth flagging: Emiratisation. Private companies on the mainland with 50 or more skilled employees must hit Emiratisation targets — currently 2% growth per year toward a 10% Emirati workforce by end of 2026. Non-compliance penalties run AED 96,000 per unfilled Emirati position per year (2024 figures). For companies with 20-49 staff in 14 priority sectors, similar rules now apply since 2024.

DIFC and ADGM: why the free zone matters

If you're working out of Gate Village, ICD Brookfield, or anywhere else inside the DIFC, DIFC Employment Law No. 2 of 2019 governs your contract — not federal law. Practical differences:

• Notice periods scale with service: 7 days during probation, 30 days under 5 years' service, 90 days for 5+ years
• DEWS replaces gratuity for service from 1 February 2020
• The DIFC Courts (English-language, common law) hear disputes, not the Dubai labour court
• Penalties for unpaid wages: a fixed daily penalty of the employee's daily wage for each day late, capped at the unpaid amount

ADGM operates similarly under its 2024 Employment Regulations, with disputes heard in the ADGM Courts.

The choice of free zone is, frankly, a substantive legal choice — not just a real estate decision. Pick wrong and you've picked your forum, your gratuity mechanics, and your termination rules without realising it.

Filing a complaint: the actual process

For mainland disputes, you file with MOHRE first — through the app, the call centre (800 60), or a Tas-heel centre. MOHRE attempts mediation. If the claim is under AED 50,000 or both parties agree, the MOHRE legal officer can issue a binding decision (a 2022 reform). Otherwise, MOHRE refers the file to the labour court within 14 days and you proceed to litigation.

DIFC and ADGM disputes go straight to their respective courts — no MOHRE step.

Bring everything: signed contract, payslips, WPS records, emails, termination letter, leave records. Cases are won and lost on documents, not on what people remember.

For specific employment questions, browse our /categories/employment-questions — though if your situation involves termination or unpaid amounts above AED 100,000, get advice before filing.

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Sources

[1] Federal Decree-Law No. 33 of 2021 on the Regulation of Labour Relations (UAE) — https://uaelegislation.gov.ae

[2] Cabinet Resolution No. 1 of 2022 on the Implementing Regulation of Federal Decree-Law No. 33 of 2021

[3] Federal Decree-Law No. 20 of 2023 amending Federal Decree-Law No. 33 of 2021

[4] Ministry of Human Resources and Emiratisation — https://www.mohre.gov.ae

[5] DIFC Employment Law, DIFC Law No. 2 of 2019 (as amended) — https://www.difc.ae/laws-regulations

[6] ADGM Employment Regulations 2024 — https://www.adgm.com

[7] Wages Protection System guidance, MOHRE and UAE Central Bank

[8] Federal Decree-Law No. 49 of 2022 on Human Resources in the Federal Government

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