{"id":230,"date":"2026-10-08T02:24:20","date_gmt":"2026-10-08T02:24:20","guid":{"rendered":"https:\/\/vivosgroup.com\/ae\/insights\/uae-labour-law-employer-guide\/"},"modified":"2026-10-08T08:23:27","modified_gmt":"2026-10-08T08:23:27","slug":"uae-labour-law-employer-guide","status":"publish","type":"post","link":"https:\/\/vivosgroup.com\/ae\/insights\/uae-labour-law-employer-guide\/","title":{"rendered":"UAE Labour Law for Employers in 2026: Contracts, Probation, Leave and Notice"},"content":{"rendered":"\n
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Insights \u00b7 UAE Employment<\/p>\n\n\n\n

UAE Labour Law for Employers in 2026: Contracts, Probation, Leave and Notice<\/h1>\n\n\n\n

UAE private-sector employers must use renewable fixed-term contracts under Federal Decree-Law No. 33 of 2021, as amended in 2024, with probation of up to 6 months, normal hours of 8 a day or 48 a week, 30 days\u2019 annual leave after one year and notice of 30\u201390 days. Overtime earns at least 25% over basic pay, sick leave runs to 90 days, maternity leave is 60 days, salaries go through WPS by the 1st of each month and MoHRE decides claims up to AED 50,000.<\/p>\n\n\n\n

This guide is for founders, HR and finance leads at mainland and free zone employers outside DIFC and ADGM. It covers contracts, probation, hours and overtime, statutory leave, wages and insurance, termination, non-compete clauses, disputes and fines, with a worked salary example and a table of deadlines.<\/p>\n<\/div>\n\n\n\n

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Rule<\/th>Position at 8 October 2026<\/th><\/tr>
Law<\/td>Federal Decree-Law No. 33 of 2021, in force since 2 February 2022; last amended by Federal Decree-Law No. 9 of 2024<\/td><\/tr>
Contracts<\/td>Fixed-term only, renewable; no maximum term<\/td><\/tr>
Probation<\/td>Up to 6 months; employer gives 14 days\u2019 written notice to end it<\/td><\/tr>
Working hours<\/td>8 a day or 48 a week; 2 hours less a day in Ramadan<\/td><\/tr>
Overtime<\/td>Up to 2 hours a day; hourly basic wage plus at least 25%, or 50% from 10 pm to 4 am<\/td><\/tr>
Annual leave<\/td>30 days after 1 year; 2 days a month after 6 months<\/td><\/tr>
Notice period<\/td>30\u201390 days; pay in lieu at the last wage, allowances included<\/td><\/tr>
Minimum wage<\/td>None in general; AED 6,000 a month for Emiratis since 1 January 2026<\/td><\/tr>
Disputes<\/td>MoHRE decides claims up to AED 50,000; 2-year limitation period<\/td><\/tr><\/tbody><\/table><\/figure>\n<\/div>\n\n\n\n
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Who does the UAE Labour Law cover in 2026?<\/h2>\n\n\n\n

Federal Decree-Law No. 33 of 2021 covers every private-sector employer and employee in the UAE, Emirati or foreign, and has applied since 2 February 2022. Federal and local government staff, the armed forces, police and domestic workers are excluded. Its detail sits in the Executive Regulations, Cabinet Resolution No. 1 of 2022. The latest amendment, Federal Decree-Law No. 9 of 2024, took effect on 31 August 2024; the UAE Legislation portal listed none later as at 8 October 2026.<\/p>\n\n\n\n

The financial free zones are outside this guide: DIFC applies DIFC Law No. 2 of 2019, and ADGM its Employment Regulations 2024, in force since 1 April 2025. In other free zones, the authority sponsors employees and issues its own employment regulations, but the UAE Government portal says contract terms must still accord with the Labour Law, so its minimums are the baseline. Mainland employers deal with the Ministry of Human Resources and Emiratisation (MoHRE).<\/p>\n<\/div>\n\n\n\n

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Employment contracts: fixed terms, work models and probation<\/h2>\n\n\n\n

Every UAE employment contract must be for a fixed term, renewable by agreement, with no legal maximum. If both sides keep performing after expiry, it is renewed on the same terms, and renewals count as continuous service. Unlimited contracts under the 1980 law had to be converted, by a deadline MoHRE extended to 31 December 2023. Mainland contracts use MoHRE\u2019s approved templates, and no one may start work before MoHRE issues a work permit.<\/p>\n\n\n\n

Six work models are recognised: full-time; part-time for one or more employers; temporary, for a set period or task; flexible, where hours or days vary with the workload; remote, wholly or partly outside the workplace; and job sharing, where duties are divided by prior agreement. Probation lasts up to 6 months, carries no paid sick leave, and its notice depends on who ends it.<\/p>\n\n\n\n

Who ends probation<\/th>Written notice<\/th>Other rule<\/th><\/tr><\/thead>
Employer<\/td>14 days<\/td>Probation cannot exceed 6 months<\/td><\/tr>
Employee joining another UAE employer<\/td>1 month<\/td>The new employer reimburses the original employer\u2019s recruitment costs, unless agreed otherwise<\/td><\/tr>
Employee leaving the UAE<\/td>14 days<\/td>If they return on a new permit within 3 months, the new employer pays those costs, unless agreed otherwise<\/td><\/tr>
Employee breaking these rules<\/td>Not applicable<\/td>Can be barred from a new work permit for one year<\/td><\/tr><\/tbody><\/table><\/figure>\n\n\n\n

A non-compete clause does not apply when a contract ends during probation.<\/p>\n<\/div>\n\n\n\n

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Working hours, overtime and leave entitlements<\/h2>\n\n\n\n

Normal hours are capped at 8 a day or 48 a week, 2 hours a day less in Ramadan. Overtime is limited to 2 hours a day and total hours to 144 in any 3 weeks. Each overtime hour earns the hourly basic wage plus at least 25%, or 50% between 10 pm and 4 am (shift workers excepted). Work on a rest day or public holiday earns a substitute day off, or the day\u2019s pay plus at least 50% of the basic wage.<\/p>\n\n\n\n

One Cabinet list of paid holidays applies to both sectors: New Year\u2019s Day, Eid Al Fitr (up to 4 days), Arafah Day, Eid Al Adha (3 days), Hijri New Year, the Prophet\u2019s birthday and National Day on 2 and 3 December. Up to half of annual leave can be carried forward, and an employer may not block its use for more than 2 years. The table compares each statutory leave.<\/p>\n\n\n\n

Leave<\/th>Entitlement<\/th>Pay<\/th>Conditions<\/th><\/tr><\/thead>
Annual<\/td>30 days after 1 year; 2 days a month after 6 months<\/td>Wage while on leave; untaken days paid at basic wage<\/td>Half may be carried forward<\/td><\/tr>
Public holidays<\/td>12\u201313 days, depending on the length of Ramadan<\/td>Full pay<\/td>Substitute day or 50% premium if worked<\/td><\/tr>
Sick<\/td>Up to 90 days a year<\/td>15 days full, 30 half, 45 unpaid<\/td>After probation only<\/td><\/tr>
Maternity<\/td>60 days<\/td>45 days full, 15 half<\/td>45 more unpaid days for related illness; extra leave for a sick or disabled child<\/td><\/tr>
Parental<\/td>5 working days<\/td>Full pay<\/td>Either parent, within 6 months of birth<\/td><\/tr>
Bereavement<\/td>5 days (spouse); 3 days (parent, child, sibling, grandchild, grandparent)<\/td>Full pay<\/td>Paid under Article 32<\/td><\/tr>
Study<\/td>10 working days a year<\/td>Not stated in the law<\/td>Exams at an approved UAE institution; 2 years\u2019 service<\/td><\/tr><\/tbody><\/table><\/figure>\n<\/div>\n\n\n\n
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Wages, WPS, minimum wage and mandatory insurance<\/h2>\n\n\n\n

Every MoHRE-registered establishment must pay salaries through the Wage Protection System (WPS). Under Ministerial Resolution No. 340 of 2026, which law firms report took effect on 1 June 2026, the previous month\u2019s salary is due on the 1st of each month, and at least 85% of wages due must be paid on time. MoHRE sends alerts from day 2 of a delay, suspends new work permits from day 5, and fines and downgrades repeat offenders from day 11; from day 16 and day 21 come labour disputes, travel bans and possible prosecution.<\/p>\n\n\n\n

The law sets no general minimum wage, though Article 27 lets the Cabinet set one. The only minimum in force is AED 6,000 a month for Emiratis in the private sector, from 1 January 2026. Deductions are allowed only on listed grounds, including interest-free loans with written consent, overpayments (up to 20% of the wage), disciplinary fines (up to 5%) and court-ordered debts (up to a quarter), never above 50% in total. Employers may not charge staff recruitment costs.<\/p>\n\n\n\n

Two insurances are compulsory. The Involuntary Loss of Employment (ILOE) scheme has been mandatory since 1 January 2023 for private-sector employees other than owner-investors, domestic workers, temporary-contract staff, under-18s and pensioners. Premiums are up to AED 5 a month on a basic salary of AED 16,000 or less and AED 10 above it; the employee\u2019s AED 400 fine for not subscribing can be deducted from WPS wages or gratuity. Since 1 January 2025, employers in every emirate must provide health insurance before residence is issued or renewed; the basic package costs AED 320 a year.<\/p>\n<\/div>\n\n\n\n

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How to end a UAE employment contract: notice, dismissal and non-compete<\/h2>\n\n\n\n

Either party may end a contract for a legitimate reason with written notice of 30\u201390 days, as the contract sets. The employee earns full wage during notice; a party that skips notice owes a notice allowance at the last wage. During employer notice, the employee may take one unpaid day a week to job-hunt. Contracts also end by written agreement, expiry, death or permanent disability, closure, bankruptcy or a prison sentence of 3 months or more.<\/p>\n\n\n\n

Dismissal without notice needs an Article 44 ground, such as forgery, serious loss caused by the employee, disclosing secrets, intoxication or assault at work, or unexcused absence of more than 20 non-consecutive days a year or 7 in a row, plus a written investigation. Dismissal because the employee made a serious MoHRE complaint, or brought a lawsuit proved valid, is arbitrary: the court can award up to 3 months\u2019 wage. Ill health ends employment only after sick leave is used up. Foreign full-time staff with a year\u2019s service also earn gratuity of 21 days\u2019 basic wage a year for the first five years and 30 days after that.<\/p>\n\n\n\n

A non-compete must be limited in time, place and type of work to what protects legitimate business interests, and cannot exceed 2 years after the contract ends. It is void if the employer ended the contract unlawfully, and it falls away if compensation of up to 3 months\u2019 wage is paid to the former employer with its written approval. The employer must sue within one year of discovering a breach. For any termination, follow these steps.<\/p>\n\n\n\n

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  1. Confirm the ground: a legitimate reason with notice, or an Article 44 ground with a written investigation and reasoned decision.<\/li>\n\n
  2. Check for protection: a recent MoHRE complaint or lawsuit, unused sick leave, or probation, where notice is 14 days.<\/li>\n\n
  3. Serve written notice of 30\u201390 days, or pay the notice allowance at the last wage.<\/li>\n\n
  4. Calculate final dues: salary to the last day, untaken leave and gratuity at basic wage, and any notice allowance, less lawful deductions only.<\/li>\n\n
  5. Pay everything within 14 days of the contract ending.<\/li>\n\n
  6. Cancel the work permit and residence, and remind the employee that an ILOE claim must be filed within 30 days.<\/li>\n\n
  7. Keep the file for at least 2 years, the claims period.<\/li>\n<\/ol>\n<\/div>\n\n\n\n
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    Worked example: overtime, leave pay and notice pay on AED 24,000 a month<\/h2>\n\n\n\n

    Take a basic wage of AED 18,000 a month plus AED 6,000 of housing and transport allowances, a total wage of AED 24,000. The law defines the basic wage as excluding allowances and the wage as basic plus allowances and benefits, and each payment uses one of the two. The law fixes no daily rate, so this example divides the month by 30 and the day by 8 hours.<\/p>\n\n\n\n

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    1. Hourly basic rate: AED 18,000 \u00f7 30 \u00f7 8 = AED 75.<\/li>\n\n
    2. Overtime, 10 hours at 25% (basic wage, Article 19): AED 75 \u00d7 1.25 \u00d7 10 = AED 937.50.<\/li>\n\n
    3. The same 10 hours between 10 pm and 4 am, at 50%: AED 75 \u00d7 1.5 \u00d7 10 = AED 1,125.<\/li>\n\n
    4. 30 days of annual leave taken (wage, Article 29): AED 24,000 \u00f7 30 \u00d7 30 = AED 24,000, the normal monthly pay.<\/li>\n\n
    5. 30 untaken days paid out on exit (basic wage, Executive Regulations Article 19): AED 18,000 \u00f7 30 \u00d7 30 = AED 18,000.<\/li>\n\n
    6. Pay in lieu of 30 days\u2019 notice (last wage, Article 43): AED 24,000 \u00f7 30 \u00d7 30 = AED 24,000.<\/li>\n\n
    7. Arbitrary dismissal ceiling (wage, Article 47): 3 \u00d7 AED 24,000 = AED 72,000.<\/li>\n\n
    8. ILOE: basic above AED 16,000 means the AED 10 category; the benefit is 60% \u00d7 AED 18,000 = AED 10,800 a month for up to 3 months, under the AED 20,000 cap.<\/li>\n<\/ol>\n\n\n\n

      Spreading the AED 216,000 annual basic wage over 365 days gives overtime of AED 924.66. Pick one method, put it in your HR policy and apply it to everyone.<\/p>\n<\/div>\n\n\n\n

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      What changed for UAE employers from 2024 to 2026?<\/h2>\n\n\n\n

      Since mid-2024 the changes have tightened enforcement rather than entitlements: probation, hours, leave and notice rules are as they were in 2022. The changes concern disputes, fines, salary payment dates, health insurance and Emirati pay, listed below by the date each took effect. As at 8 October 2026, the UAE Legislation portal showed no amendment to the decree-law itself after 2024.<\/p>\n\n\n\n

      Date<\/th>Change<\/th><\/tr><\/thead>
      31 August 2024<\/td>Federal Decree-Law No. 9 of 2024: 2-year limitation, MoHRE decisions challenged in the Court of First Instance, fines of AED 100,000\u20131,000,000<\/td><\/tr>
      1 January 2025<\/td>Employer health insurance required for residence in all seven emirates<\/td><\/tr>
      1 April 2025<\/td>ADGM Employment Regulations 2024 in force (outside federal law)<\/td><\/tr>
      1 January 2026<\/td>AED 6,000 minimum monthly wage for Emiratis<\/td><\/tr>
      1 June 2026 (law firm reports)<\/td>WPS Resolution No. 340 of 2026: salaries due on the 1st, 85% threshold, permits suspended from day 5<\/td><\/tr>
      31 December 2026<\/td>Second 2026 Emiratisation deadline for companies with 50 or more employees<\/td><\/tr><\/tbody><\/table><\/figure>\n<\/div>\n\n\n\n
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      Penalties, fines and labour disputes<\/h2>\n\n\n\n

      Article 60, as amended in 2024, sets fines of AED 100,000\u20131,000,000 for employing without a work permit, recruiting workers and not giving them work, misusing permits, closing a business without settling workers\u2019 rights, and employing juveniles unlawfully. Fictitious employment, including fake Emiratisation, carries the same range multiplied by the number of workers; MoHRE may settle for at least 50% of the minimum fine plus repaid incentives. MoHRE has also imposed administrative fines of AED 20,000\u2013100,000 per fake Emiratisation case.<\/p>\n\n\n\n

      Disputes start with a MoHRE complaint and a settlement attempt. MoHRE decides claims up to AED 50,000, and any claim where a party ignored an earlier settlement; either side can file in the Court of First Instance within 15 working days, which suspends the decision. Larger claims go to court, and workers pay no court fees on claims up to AED 100,000. MoHRE can order wages paid for up to 2 months during a dispute. The deadlines below carry the most risk.<\/p>\n\n\n\n

      Obligation<\/th>Deadline<\/th>If missed<\/th><\/tr><\/thead>
      Monthly salary via WPS<\/td>1st of each month<\/td>New permits suspended from day 5; fines for repeats<\/td><\/tr>
      Ending probation (employer)<\/td>14 days\u2019 written notice<\/td>Breach of Article 9<\/td><\/tr>
      Termination notice<\/td>30\u201390 days in writing<\/td>Notice allowance at the last wage<\/td><\/tr>
      Final settlement<\/td>14 days after the contract ends<\/td>MoHRE complaint<\/td><\/tr>
      Health insurance<\/td>Before residence issue or renewal<\/td>No residence<\/td><\/tr>
      Challenge to a MoHRE decision<\/td>15 working days<\/td>Decision enforceable<\/td><\/tr>
      Non-compete claim<\/td>1 year from discovering the breach<\/td>Claim not heard<\/td><\/tr>
      Labour claims<\/td>2 years from the end of employment<\/td>Claim not heard<\/td><\/tr>
      Emiratisation (50+ staff)<\/td>30 June and 31 December 2026<\/td>Contribution per unfilled position<\/td><\/tr><\/tbody><\/table><\/figure>\n<\/div>\n\n\n\n
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      Employer compliance checklist for 2026<\/h2>\n\n\n\n

      An employer should hold these records for every employee, because most labour claims turn on documents the employer cannot produce when MoHRE asks. Review the file whenever a contract is renewed, a salary or job title changes or someone leaves, and keep it for at least 2 years after the employment ends, the period in which a claim can still be brought.<\/p>\n\n\n\n