Are you planning to hire employees in the UAE or already managing a workforce there? Then you must understand the UAE Labour Law. The UAE Labour Law is the legal framework that regulates employer-employee relationships, covering employment contracts, wages, working hours, leave policies, termination procedures, and workplace safety responsibilities. The updated regulation was introduced under Federal Decree-Law No. 33 of 2021 and came into effect on 2 February 2022, replacing the previous 1980 law and modernising employment practices.
The United Arab Emirates has one of the most international workforces globally over 8.9 million residents living in the country, and nearly 90% are expatriates. With a labour force participation rate above 77%, employers must follow strict compliance standards to operate smoothly and avoid penalties.
This blog on the 2026 UAE Labour Law Guide for Employers helps businesses understand updated compliance requirements, hiring rules, contracts, employee rights, and termination policies so they can manage teams legally and confidently in 2026.
Understanding the UAE Labour Law Rules – Simple Guide for Employers
Running a business in the UAE is easy only when you follow the rules correctly. The UAE labour law rules explain how you can hire employees, what benefits you must provide, and how to legally manage or terminate staff. This UAE labour law guide is written in simple language so every employer, even first-time business owners, can understand their responsibilities.
1. Employment Contracts (Mandatory Fixed-Term System)
Under UAE Labour Law 2026, unlimited contracts no longer exist in the private sector. Every employee must work under a limited (fixed-term) contract.
Key employer responsibilities
You must provide a written contract before employment visa approval. The contract must be registered with MOHRE (Ministry of Human Resources & Emiratisation). The job offer letter, salary, designation, and benefits must match the final labour contract. Any change later requires employee approval.
Contract duration rules
- Maximum period: 3 years
- Renewable multiple times
- Can be terminated earlier with notice
If your offer letter and contract details differ, the employee can legally complain — and the case is usually decided in the employee’s favour.
2. Probation Period Rules
If an employee completes the 6-month probation period and keeps working in the company, those 6 months will be counted as part of their total service time. Under the new UAE labour law, the maximum probation period is still 6 months. If the employer wants to end the job during probation, they must give the employee 14 days’ notice in advance.
If the employee decides to resign during probation and plans to leave the UAE, they must also give a written notice of 14 days. However, if the employee wants to leave the company to join another company inside the UAE, they must give one month’s written notice. In this situation, the new employer must pay the old employer for recruitment expenses such as visa or work permit costs, unless both companies mutually agree not to charge it.
3. Working Hours & Overtime Pay
According to UAE labour law rules, working hours are clearly defined.
Normal working hours
- 8 hours per day
- 48 hours per week
- 6 hours per day during Ramadan (for all employees)
Overtime payments
- Extra working hours – +25% of hourly wage
- Night work (10 PM – 4 AM) – +50%
- Working on a weekly off – extra day off OR + 50% salary
4. Salary Payment & WPS System
The Wage Protection System (WPS) is one of the most strictly enforced UAE labour law rules.
Employer obligations
- Salary must be paid through bank transfer or an exchange approved by WPS
- Salary must be paid within 15 days of the due date
- Cash payments are illegal
- Partial salary payments are violations
Penalties for delay
- Company fine
- Work permit suspension
- Company downgraded category
- Labour case eligibility for an employee
Note – In the 2026 labour law of the UAE, repeated violations may even block new visas for the company.
5. Leave Policy (Employee Benefits You Must Provide)
The UAE Labour Law Guide 2026 clearly defines paid leave entitlements. Employers cannot refuse approved leave unless there is a genuine operational reason.
Annual Leave
- Employees completing 1 year – 30 days paid leave
- Less than 1 year – 2 days per month
Sick Leave
- First 15 days: full pay
- Next 30 days: half pay
- Remaining 45 days: unpaid
Maternity Leave
- 60 days total
- 45 days full pay + 15 days half pay
Additional unpaid leave if medically required
Parental Leave
Both mother and father – 5 working days
Study Leave
Earlier, employees did not get any official leave for studies. Now under the updated UAE labour law, employees who have worked in a company for more than 2 years can take 10 days of paid study leave every year to attend exams or educational courses.
Compassionate Leave
In the past, there was no rule for leave after the death of a family member. Now the law allows employees to take leave during such situations:
- 5 days leave if the employee’s spouse passes away
- 3 days leave if a parent, sibling, grandparent, or grandchild passes away
Public Holidays
As announced annually by the UAE government
6. End of Service Gratuity (EOSB)
Under the old UAE labour law, employees who completed at least one year of service were eligible for an end-of-service gratuity payment. It was calculated as 21 days of basic salary for each year of service during the first five years and 30 days of basic salary for every year after five years. The calculation was based on calendar days, and the total gratuity could not exceed two years’ salary. However, if an employee was terminated for serious misconduct, they lost the gratuity, and if they resigned before completing five years, the gratuity amount was reduced.
Under the new UAE labour law (from 2025 onwards), employees who complete one year of service still receive gratuity, and the calculation method remains the same. The major change is that employees generally keep their gratuity even if dismissed, and there is no reduction when they resign. Employers must pay the gratuity along with all final dues within 14 days from the employee’s last working day.
7. Termination & Notice Period Rules
The 2026 labour law ofthe UAE focuses heavily on fair termination. You cannot terminate without reason. Acceptable reasons include performance, redundancy, or company closure — but they must be documented.
Notice period
- Minimum: 30 days
- Maximum: 90 days
Arbitrary dismissal compensation
Up to 3 months’ full salary if termination is unfair.
8. Modern Work Models Allowed in UAE
The updated UAE labour law guide 2026 supports flexible employment. Employers can legally hire workers under:
- Part-time contracts
- Temporary contracts
- Freelance permits
- Remote work agreements
- Job sharing
9. Workplace Rights & Employer Duties
Employers must provide:
- Safe workplace environment
- Medical insurance (mandatory in most Emirates)
- No discrimination based on nationality, gender, or religion
- Equal pay for men and women doing the same work
- Protection against harassment or bullying
- Violating these UAE labour law rules can result in heavy fines and court cases.
Fines on Labour Law Violations
Earlier (before the latest updates applied around 2025), UAE courts had only limited power to penalise employers for labour law violations. Now, under the updated rules, courts can directly impose fines on employers for breaking any part of the labour law. This means companies must be much more careful while hiring and managing employees.
Current fines include:
- AED 20,000 to AED 100,000 – if an employer gives false details while hiring a foreign (expatriate) worker
- AED 50,000 to AED 200,000 – if a company hires someone illegally or recruits a worker without actually having a real job available
- AED 5,000 to AED 1,000,000 – for any other violation of the UAE Labour Law rules
If the employer repeats the same mistake, the court can double the fine.
Final Summary
The UAE Labour Law Guide 2026 is designed to create balance – protecting employees while ensuring businesses operate transparently. Understanding the UAE labour law rules, paying salaries on time, issuing proper contracts, and handling termination legally will protect your company from penalties. Simply put, if employers follow the UAE Labour Law 2026, they gain smoother operations, stronger employee trust, and long-term business stability in the UAE market.
