🇦🇪 UAE Labor Law 2025: What Every Employer and Employee Should Know

The UAE’s labor landscape has undergone major reforms to enhance worker protection, streamline contracts, and align with global standards. Here’s a comprehensive guide to help you understand the latest updates.

Overview: Why UAE Labor Law Matters

The UAE’s labor law is governed by Federal Decree-Law No. 33 of 2021, amended by Federal Decree-Law No. 14 of 2022, with further updates in 2024 and 2025. These reforms aim to:

• Modernize employment practices
• Attract global talent and investment
• Balance employer-employee rights
• Support flexible work models and dispute resolution

Whether you’re an HR professional, business owner, or employee, understanding these laws is essential for compliance and protection.

Key Changes in UAE Labor Law (2025)

1. Fixed-Term Contracts Are Mandatory

• Unlimited contracts abolished: All employment agreements must now be fixed-term, up to 3 years, renewable.
• Contracts must be written, with copies for both parties.
• Employers must update legacy contracts to comply with this format

Flexible Work Models Recognized

• The law now formally recognizes:
  • Full-time
  • Part-time
  • Temporary
  • Freelance
  • Remote work
• Employers must clearly define work type in contracts

Probation Period Rules

• Maximum probation: 6 months
• Employers must give 14 days’ notice to terminate during probation.
• Employees must give 30 days’ notice if leaving for another UAE job

End-of-Service Benefits

• Gratuity is calculated based on basic salary only.
• No deductions for absences or penalties.
• Employees leaving before contract ends may still be eligible, depending on cause

Anti-Discrimination & Equal Pay

• Discrimination based on gender, race, religion, or disability is prohibited.
• Equal pay for equal work is mandated, especially for women

Leave Entitlements

• Annual leave: 30 calendar days after 1 year of service
• Maternity leave: 60 days (45 paid, 15 unpaid)
• Paternity leave: 5 days
• Bereavement leave: 3–5 days depending on relation
• Study leave: 10 days for employees enrolled in accredited institutions

Working Hours & Overtime

• Standard hours: 8 hours/day, 48 hours/week
• Overtime capped at 2 hours/day, paid at 125–150% of hourly rate
• Friday is no longer mandatory weekly off, but one rest day per week is required

Termination & Notice Periods

• Notice period: 30–90 days, depending on contract
• Termination must be justified and documented
• Unlawful termination may result in compensation up to 3 months’ salary

Dispute Resolution

• Labor disputes must be filed with the Ministry of Human Resources and Emiratisation (MoHRE)
• Free mediation is offered
• If unresolved, cases go to labor courts within 15 days

Free Zone Exceptions

• DIFC and ADGM have independent employment laws
• All other free zones must comply with Federal Law No. 33

Compliance Tips for Employers

• Review and update all contracts to fixed-term format
• Train HR teams on new leave and termination rules
• Use MoHRE’s digital platforms for contract registration and dispute filing
• Avoid discriminatory language in job ads and internal policies
• Maintain clear documentation for performance reviews and disciplinary actions

Rights & Responsibilities for Employees

• Request a copy of your employment contract
• Track your leave and overtime accurately
• Report discrimination or harassment to MoHRE
• Understand your notice period and gratuity eligibility
• Use official channels for complaints—avoid informal disputes

Penalties for Non-Compliance

• Fines up to 100,000 AED for contract violations
• Suspension of business licenses for repeated offenses
• Blacklisting of companies that engage in illegal termination or discrimination
• Employers may be barred from hiring new workers until issues are resolved

FAQs