UAE Employment Law — Employer Rights and Obligations Guide 2026
UAE employment law was significantly reformed in 2022 with new Labour Law (Federal Decree-Law No. 33 of 2021) replacing the old law. The new law introduces flexible work models, end-of-service gratuity changes, and enhanced worker protections. This guide covers UAE employment law for employers in 2026.
In this guide:
UAE Labour Law Overview
- Applies to: all private sector employees in UAE mainland; free zone employees (unless the free zone has its own employment law, e.g., DIFC, ADGM have their own labour law)
- DIFC: DIFC Employment Law (DIFC Law No. 4 of 2021); applies within DIFC; similar to UAE Labour Law but differences exist (no unlimited contracts in DIFC)
- ADGM: ADGM Employment Regulations; apply within ADGM; also separate from mainland
- Does NOT apply to: UAE nationals in government sector (Federal Law No. 49 of 1992 governs); domestic workers (separate law — Federal Law No. 10 of 2017)
UAE Employment Contract Requirements
- Written contract: mandatory for all employees; must be in Arabic (or bilingual Arabic/other); employee must receive a copy
- Fixed-term only: new UAE Labour Law (2022) abolished unlimited-term contracts; all new contracts must be fixed-term (maximum 3 years, renewable); existing unlimited contracts converted to fixed-term when renewed
- Probation: maximum 6 months probation; employee can resign during probation with 14 days’ notice; employer can terminate during probation with 14 days’ notice
- Language: contract must be in Arabic; if bilingual, Arabic version prevails in any dispute
UAE Working Hours and Overtime
- Standard: 8 hours/day; 48 hours/week; reduced to 6 hours/day and 36 hours/week during Ramadan for Muslim employees
- Overtime: hours beyond standard entitle to 125% of hourly rate; between 9pm-4am: 150% of hourly rate
- Maximum: total work hours including overtime must not exceed 12 hours/day
- Rest day: Friday is the official weekly day off for mainland; some free zones allow different days
UAE End of Service Gratuity (EOSG)
- Calculation: for employees who complete 1+ year of service; 21 calendar days’ basic salary per year for the first 5 years; 30 calendar days’ basic salary per year after 5 years
- Maximum: total gratuity cannot exceed 2 years’ total salary
- New Savings Scheme: UAE government is gradually replacing EOSG with an employer-funded savings scheme (similar to a pension); some free zones have already moved to the new scheme; expect mainland transition over the coming years
- DIFC DEWS: DIFC already has its own end-of-service savings scheme (DEWS); 8.33% of basic salary monthly into employee savings account
UAE Annual Leave
- Minimum: 30 calendar days annual leave after completing 1 year of service
- During probation: no annual leave entitlement; employee can take annual leave only after completing 6 months if employer agrees
- Encashment: employees can encash annual leave that was accrued but not taken (employer must pay basic salary for the leave days)