Hire Employees in the UAE: A Guide for Employers

Planning to expand your business and hire employees in the UAE? Understanding local labor laws and regulations is an important step.

The UAE’s labor laws are complicated, with strict requirements on everything from work visas and employment contracts to pay, benefits, and termination policies. Any misstep in the process can result in penalties and legal challenges.

This guide walks you through the essentials of hiring employees in the UAE while staying compliant with the laws.

Things to Consider Before Hiring Employees in the UAE

Minimum Wage in UAE

There is no national minimum wage in the UAE. However, the Ministry of Human Resources and Emiratisation (MoHRE) mandates employers to ensure that the salaries they pay are enough to cover their employees’ basic needs.

Probation Period

According to the Federal Decree-Law No. (33) of 2021 about employment regulations, there is a maximum of 6 months probationary period in the UAE. However, depending on the job, some employers opt for a three-month probationary period for their employees.

Working Hours

In the private sector, there is a maximum of 48 hours per week as defined by the labor law or 8 hours per day. If any employee works more than these hours, they are entitled to an additional 25% of the prorated salary for the extra time.

During the holy month of Ramadan, the work day in the UAE is reduced by 2 hours.

Timely Salary Payments

According to Ministerial Order No. 739 of 2016 on Wages Protection, employees are entitled to timely wage payments, typically within one month of completing their work. If an employer fails to pay the employee within 30 days from the due date, MoHRe imposes administrative penalties such as blocking the ability to grant a work permit.

The wages are paid via the Wage Protection System (WPS) developed by Central Bank and MoHRE. WPS is an electronic system for transferring employee salaries and protects both employer’s and employee’s rights in the UAE.

Here’s how the WPS works:

Open your corporate bank account and sign a contract with a WPS agent such as a bank that will transfer salaries to your employees
Register your account with MoHRE
Submit the salary information file (SIF) via WPS to your WPS agent
MoHRE and the Central Bank will conduct a salary check to make sure all the details are correct and meet the requirements. Once done, they will issue a payment order to your WPS agent
WPS agent transfers money to your employee’s bank accounts

Pension

Expats in the UAE are not eligible for the pension scheme, employers have to provide end-of-service benefits. The end-of-service benefit is calculated as:

21 days of basic salary for each year for the first 5 years of service
30 days of basic salary for each year afterward

In the case of hiring UAE/GCC nationals, you have to contribute 12.5% while your employee contributes 5% towards the mandatory pension scheme.

Public Holidays in the UAE

As per the 2024 cabinet decision, both private and public sector employees are entitled to 14 public holidays in the UAE.

These holidays are:

New Year’s Day: January 1
Eid Al Fitr: Lasts for 4 days, starting from the 29th of Ramadan
Arafah Day and Eid Al Adha: 4 days, from the 9th to the 12th of Dhu al Hijjah
Islamic New Year: 1st of Muharram
Prophet Mohammed’s Birthday: 12th of Rabi’ Awwal
National Day: December 2 and 3, totaling 2 days

Leaves

In addition to the public holidays, employees are entitled to annual leave, maternity leave, sick leave, paternity leave, and more.

Here is an overview of the different types of leaves available to employees in the UAE:

Type of Leave	Eligibility	Duration and Pay
Annual Leave	Employees with 1 year of employment	30 days of fully paid leave
Maternity Leave	Female married employees	60 days (45 days fully paid, 15 days half-paid); an additional 45 days without pay for illness due to pregnancy or childbirth
Parental Leave	All employees	5 working days of paid leave
Sick Leave	After probationary period	Full pay for the first 15 days, half pay for the next 30 days, no pay for the remaining 45 days; Notification within 3 days with a medical report
Compassionate Leave	All employees	5 days for the death of a spouse, 3 days for the death of a parent, child, sibling, grandchild, or grandparent

Termination

In case of termination, you need to provide a 30-day notice period to your employee and ensure a smooth transition. Even if the employee terminates the employment contract, the notice period remains the same.

During the probation period, the notice period depends on the contract (which can be 14 days or immediate).

Requirements to Hire Employees in the United Arab Emirates

Setup Your Company

To hire employees in the UAE, one of the first requirements is to register your company in the UAE. You can register your company in any of the 40+ free zones or the mainland, depending on your business objectives.

If your company is not based in the UAE, an employer of record (EOR) such as RecruitGo can assist you in hiring and relocating employees.

Hiring Foreign Employees in the UAE

For hiring foreigners in the UAE, employers are required to get a work permit and sponsor employee visas.

The process includes the following:

Obtain the entry quota approval from MoHRE
Submit the signed job contract in Arabic or English
Apply for work permits and entry visas for your employees

Keep in mind that the employer bears the cost for the work permit, etc, and is not allowed to deduct these amounts from employees’ salaries.

Hiring UAE Nationals

For hiring UAE nationals, you need to register them with MoHRE and enroll your employees in the mandatory pension scheme. The mandatory pension scheme is applicable only when you are hiring full-time employees.

Hire and Relocate Employees in UAE with RecruitGo’s EOR Service

RecruitGo is an employer of record that enables you to hire, manage, relocate, and pay employees in the UAE without registering your company. As the legal employer, RecruitGo handles all the administrative work and ensures compliance with local laws and regulations.