Navigating UAE Labour Law: A Guide for New Employers on Contracts, Visas, and WPS
- Editor
- Oct 26, 2025
- 6 min read
The UAE’s private-sector employment framework is governed by Federal Decree-Law No. 33 of 2021 (effective Feb 2022) and subsequent amendments (including Decree-Law No.9 of 2024). This law standardizes contracts, wages, leave, and benefits. Understanding the UAE labour law for employers is critical, as mainland companies must follow MOHRE (Ministry of Human Resources & Emiratisation) regulations, while free-zone entities may follow zone-specific laws (e.g. DIFC/ADGM use their own common-law rules). Businesses should note that the UAE frequently updates labour rules, so staying current is crucial.
Employment Contracts: Types and Essentials
A key component of the labour law is understanding the different UAE employment contract types.
Fixed-term contracts: All private-sector hires must have a written contract for a specific term (up to 3 years). Unlimited-duration contracts have been abolished; existing unlimited contracts should be converted to renewable fixed-term ones. The contract – whether for full-time, part-time, project-based, remote or flexible work – must clearly state the role, salary (in AED) and allowances, start/end dates, leave entitlements, notice periods, and termination clauses.
Full-Time vs Part-Time: Full-time means the standard 48-hour week. Part-time contracts (approved by MOHRE) allow fewer hours/days; pay and benefits (leave, gratuity, insurance) are pro-rated by hours worked.
Temporary/Project: These end when the project or time term finishes. They avoid long-term commitment but still guarantee pay and basic rights until completion.
Flexible/Remote/Job-Sharing: The law now recognizes remote work, flexible hours and job-sharing. Employers may offer these arrangements, with contracts reflecting the specific schedule and duties. All models must obey labour standards and entitlements.
Key requirements: Contracts must be bilingual (Arabic and English) and filed with the appropriate authority (MOHRE for mainland workers, or the free zone authority if applicable). Employers should include a probation period (max 6 months) and specify any notice and evaluation terms. Renewal of contracts is by mutual agreement and must be documented in writing. Every contract must reference statutory benefits: salaries via WPS (see next section), end-of-service gratuity, annual leave, etc. In practice, firms often adopt MOHRE’s standard contract formats to ensure compliance.
Wages and Payroll Compliance (WPS)
All salaries must be paid through the UAE’s Wage Protection System (WPS). Achieving WPS compliance in the UAE is a mandatory electronic payroll clearing platform for private companies. Payment must be in UAE Dirhams and on time. By law (Ministerial Resolution 598/2022), wages are typically due by the first day of the month following the work period. If no payment interval is specified in the contract, employees must be paid at least monthly. Employers who miss the due date by more than 15 days (unless a shorter period was contractually agreed) are considered in default.
Key WPS rules:
Minimum payment threshold: To be compliant, at least 80% of the employee’s agreed salary must be transferred via WPS each cycle. Allowed deductions (for loans, advances, etc.) must not exceed 50% of the wage and must be approved in advance by MOHRE/WPS.
Timely payment: Employers should schedule payroll so that employees’ accounts are funded by the due date. If wages are delayed beyond 15 days past due, MOHRE considers the employer to be in default. Late or partial payments can trigger reminders and investigations.
Penalties: Non-compliance has serious consequences. Fines, work-permit suspensions, and even criminal referral can result from repeated WPS violations. For example, MOHRE now conducts frequent inspections and will levy penalties (or suspend visa approvals) on firms that fail to pay wages on time.
In practice, employers should register all employees in WPS on MOHRE’s portal, deposit wages via a participating bank, and maintain clear payroll records. Linking WPS to your HR/payroll system is considered a best practice to ensure 100% WPS compliance in the UAE.
UAE Visa Sponsorship for Employers
When hiring employees in Dubai, an employer must sponsor each worker’s UAE residence visa and work permit. The process of UAE visa sponsorship for employers typically involves these steps:
Job Offer & Contract: Secure the employee’s signed contract and offer letter.
Labour Permit Application: Apply (via MOHRE or free-zone authority) for a work permit based on the contract.
Medical & ID: Arrange the employee’s medical fitness test and Emirates ID registration.
Visa Stamping: Once cleared, submit passport for residency visa stamping.
The company bears all associated costs (government visa fees, medical exam fees, Emirates ID fees, etc.). Visas are usually issued for 2–3 years, depending on the jurisdiction. Employers must track expiration dates and renew on time – failure to keep a sponsored employee’s visa current can lead to fines or suspension of sponsoring rights. In other words, treat visas like any critical compliance task: plan renewals at least months in advance.
Types of visas:
Employment Visa: The standard work visa tied to your business license.
Investor/Partner Visa: Business owners or shareholders may apply for this visa (via the company’s shareholding) to live in UAE and manage the company.
Dependent Visa: Qualified employees can sponsor family members (spouse, children). This generally requires meeting a minimum salary and providing suitable accommodation.
Freelance/Expert Visas: For certain free zones, self-employed professionals can obtain freelance permits (valid in that zone).
Golden/Green Visas: Independent of company sponsorship, the UAE now offers long-term residency for high-value individuals. A 10-year Golden Visa is available for significant investors or exceptional talents, and a 5-year Green Visa for self-employed skilled professionals and entrepreneurs.
Sponsor obligations: You must maintain valid visa status for all employees while on your payroll. If an employee leaves or is terminated, the company must cancel his or her visa/permit. Lastly, keep copies of all immigration documents; MOHRE periodically audits sponsor records.
Termination and End-of-Service
When terminating an employee in Dubai, or when a contract ends, you must follow the law and the signed contract’s procedures. Key points:
Notice Periods: After probation, either party must give advance notice. The standard minimum is 30 days (unless the contract specifies longer).
UAE Probation Period Rules: During probation (up to 6 months), recent amendments require at least 14 days’ notice before termination. (Previously, employers could terminate without notice during probation; now 14 days is mandatory.) Likewise, an employee resigning in probation must give the same 14-day notice.
Fixed-term contracts: By law, fixed-term contracts can be ended on notice. Employers no longer have to pay out the remaining contract term as severance. In practice, you only need to observe the agreed notice period and final dues.
Severance (Gratuity): Upon completion of each year of service, UAE law grants an end-of-service payment. The basic end of service gratuity calculation in the UAE is: 21 days’ pay per year for the first 5 years, then 30 days per year thereafter (all calculated on the final basic salary). The gratuity must be paid at termination along with final salary and unused leave.
Final Settlements: At contract end, pay all outstanding wages, allowances, overtime, and unused leave. Cancel the employee’s visa and work permit promptly.
During Disputes: Note that new 2025 rules require continuing salaries during any labour dispute resolution. Employers may have to pay salaries (up to 60 days) while the case is pending.
Working Hours, Leave and Other Obligations
Beyond contracts and visas, employers must comply with work-time and benefits rules:
Working Hours: The standard is 8 hours/day (48 hours/week). During Ramadan, working hours for fasting Muslim employees are reduced by 2 hours daily.
Overtime: Any work beyond normal hours must be paid at overtime rates, by law, at least 125% of the normal wage for day shifts (and 150% for work between 10 p.m.–4 a.m.).
Leave Entitlements: Employees accrue annual leave of 2 calendar days per month in the first year, then 30 calendar days per year after one year’s service. The law also provides statutory sick leave, maternity leave (60 days total), 5 days paid paternity leave, and other special leave.
Health Insurance: From 2025 all private-sector employees must be covered by health insurance. Employers must purchase the approved basic insurance policy for each employee before issuing or renewing a work visa.
Social Security (Emiratis): If you employ UAE nationals, you must register with the General Pension & Social Security Authority.
Registration & Compliance: New hires must be registered on MOHRE. Keep all employment records (contracts, WPS payroll records, leave logs) for several years. These are key MOHRE requirements for the private sector.
Key Takeaways: UAE labour law for employers
By understanding these core requirements of the UAE labour law for employers, new businesses can build compliant HR processes.
Contracts: Always use written, fixed-term contracts (max 3 years) for every employee.
Payroll: Pay salaries through WPS in AED, on schedule. Full WPS compliance in the UAE is non-negotiable. Remember: 80% of salary must go to employees’ bank accounts, and don’t let any pay be more than 15 days late.
Visas: Manage your UAE visa sponsorship for employers diligently. Sponsor all expat staff, track their visa status, and budget for costs upfront.
Termination: Follow the rules for terminating an employee in Dubai. Give proper notice (30 days+, or 14 days in probation). On exit, pay all dues, including the correct end of service gratuity calculation in the UAE.
Work Conditions: Observe official working hours, overtime pay, and mandated leave. Provide health insurance as required.
Documentation: Keep dual-language copies of all contracts and HR records. Good record-keeping makes compliance audits painless.
Stay Informed: UAE labour law changes often. Regularly check MOHRE requirements for the private sector or consult local labour-law counsel.
By understanding these core requirements, new UAE employers can build compliant HR processes. The labour law is complex, and the cost of non-compliance is high.