United Arab Emirates HR Glossary

Employers must pay wages within 10 days of the agreed pay date. Late payment triggers a warning; continued non-compliance suspends the employer's ability to apply for new work permits and can result in referral to the Labour Court. The WPS covers both UAE nationals and expatriate workers. Construction companies and establishments with 100+ workers face enhanced monitoring.

Under the 2021 Labour Law, gratuity is calculated as 21 calendar days' basic wage for each year of the first five years of service, and 30 days' basic wage for each year beyond five years. Total gratuity may not exceed two years' total wage. For unlimited-contract employees who resign, entitlement is reduced on a sliding scale. The UAE is also rolling out DEWS (Defined Contribution Scheme) as an alternative.

From January 2023, companies with 50+ employees in targeted sectors must increase their Emirati headcount by 2% per year, reaching 10% by 2026. Non-compliant companies pay an AED 6,000 monthly levy per unfilled quota slot. The Nafis platform tracks compliance in real time. Smaller employers (20–49 staff) must have at least one Emirati employee.

All private-sector employment contracts must be registered with MOHRE on the Tas'heel system. MOHRE inspectors conduct workplace inspections and can impose fines for labour law violations including non-payment of wages, unsafe conditions, and Emiratisation non-compliance. Employees can file wage complaints directly through the MOHRE app, triggering a mandatory mediation process.

Leave pay is calculated on the employee's basic wage plus housing allowance. Unused leave can be accrued for up to two years, after which the employer must pay out any excess. The employer may determine when leave is taken for business reasons. If employment ends before one year is completed, the employee receives leave pay proportionate to time served.

The transition affected all existing unlimited-contract employees, who were required to move to fixed-term contracts by 1 February 2023. End-of-Service Gratuity and notice period rules apply equally. Early termination by the employer without valid cause now triggers compensation of up to 3 months' pay. This change significantly impacts HR contract management processes.

Participating employers must contribute a percentage of each employee's basic salary monthly (5.83% for less than 5 years of service, 8.33% for 5+ years). DEWS removes the large unfunded gratuity liability from the employer's balance sheet and gives employees portable retirement savings. The Dubai International Financial Centre (DIFC) has mandated DEWS for firms in its jurisdiction.

During probation, an employee who resigns and joins a new employer in the UAE must give 1 month's notice; if they leave the country, no notice is required. If the employer terminates during probation, it must give 14 days' written notice. An employee who resigns during probation and moves to a competitor may be barred from obtaining a new work permit for 1 year without the original employer's approval.