What is The New UAE Labour Law? Employment Guide 2025
Searching for a job in the UAE and want to know all the employment rules? Then no worries here we will guide you completely. On February 2, 2022, the United Arab Emirates approved a new labor law that removed Federal Law No. 8, of 1980. Regulates employment links in the private sector. 33 of 2021, which establishes new regulations and detailed guidelines for existing employment contracts and future hiring practices in the private sector.
In order to comply with international employment standards, the United Arab Emirates employers are required by the new labor law to make sure that the modified legal terms are implemented. The Ministry of Human Resources and Emiratization (MOHRE) has made a number of changes in recent years, and it aligns and regulates them. The important changes and features of the UAE’s New Labour Law have been covered in detail here.
Important Points in the UAE’s New Labor Law
1. Hiring on a Fixed Term Contract
There are two kinds of contracts in the Emirates.
Restricted
Unrestricted
Employers are required to place all workers on limited or fixed-term contracts for a minimum of three years under the updated Labor Law in the UAE, which no longer permits unlimited contracts. The new law requires employers to change the employees’ contracts to a fixed term that will last until February 2023.
2. UAE Test period Rules
An employee has a 6,month trial period under the UAE New Labor Law. It’s the same. But before terminating an employee’s employment the employer has to give written notice 14 days beforehand.
The same is true for leaving a job during the trial period; employees must give 14 days’ notice if they intend to leave the UAE or one month’s notice before joining another UAE company.
3. The Model of Flexible Work.
According to the New Labor Law, employees may take a holiday on any day of the week as long as they and their employer agree. Calculated using the base pay, extra hours can be confirmed to 144 hours per three weeks.
4. Procedures for allocating leaves.
Maternity leave
40 days of paid leave and 15 days of half-paid leave are granted to mothers. Applies to miscarriages, and infant deaths. A disabled child provides an additional 30 days of paid time off in addition to 30 days of unpaid time off.
Take a study break
Employees who have worked for two or more years are eligible to take ten days off annually to study according to a UAE institute. According to the law it is unclear if this leave will be reimbursed.
Get a new job
Employees must give notice when they resign. As required by law, they are permitted to take one unpaid day per week to look for another job in the United Arab Emirates while serving out their notice period.
Take a compassionate leave
If a spouse dies, employees are entitled to five days of paid leave. Three days of paid leave are permitted to handle funeral arrangements and family responsibilities in the event of the death of parents, siblings, or grandparents.
5. Contract Termination Rules
When terminating an employee, employers are required by UAE law to give at least 30 days’ notice; however, this can be extended to 90 days, particularly when switching from unlimited to fixed-term contracts.
30 days, Less than five years of service60 days. Years of service in 60 days.90 days greater than ten years of service.
6. Rules for Contract Suspension
During investigations, employers may suspend employees for a maximum of 30 days and pay them half. If the employee is shown to be innocent, the employer is required to fully repay the remaining withheld salary.
7. UAE Gratuity Rules 2025
Under the former UAE Labor Law, years of service (133), 35+ years determined the gratuity. The new law mandates payment within 14 days of leaving and offers a full gratuity after one year of service. Employees can also use the online Gratuity Calculator to determine their benefits.
8. Currency of Salary Payments
WPS pays UAE salaries in Dirhams or another agreed-upon currency. Employers are required by the new labor law to use the Wages Protection System in Central Bank-approved banks.
Salaries can now be paid in other currencies if both parties agree in the employment contract, whereas previously they could only be paid in UAE Dirhams.
9. Disciplinary Penalties
In order to maintain a safe workplace, the New Labor Law enforces disciplinary actions for workplace complaints. In compliance with the law employers are required to thoroughly investigate any violations and create accurate reports. The law also stipulates harsh penalties for serious violations of workplace regulations in order to safeguard equity security and order within the company.
10. Unemployment Insurance Scheme
In 2023 the UAE introduced a new unemployment insurance program that reimburses workers in the public and private sectors up to AED 20000 until they secure new employment. Investors, domestic helpers, temporary workers, pensioners, and minors are among the exclusions. Employees can access these benefits by paying a nominal annual fee.
Avoid these 7 Common mistakes while calculating Gratuity
How Employers Can Follow the New Labor Laws
These points explain how employers can follow and apply the UAE’s new labor laws.
Step 1:
Accurate pay adjustments, flexible work schedules and other recently required clauses are all part of this. Employers can maintain compliance while defending employee rights by carrying out this review.
Step 2:
To effectively communicate such policies hold frequent meetings, awareness campaigns or training sessions after they are put into place. This strategy promotes active support compliance and a courteous workplace in addition to guaranteeing that every employee is fully informed.
Conclusion
The United Arab Emirates New Labor Law sets contemporary guidelines to uphold international norms and safeguard workers rights. The following topics are covered: contracts probation leaves gratuities salary payments, workplace safety and unemployment insurance. In order to create a safe forward-thinking and balanced workplace the law benefits both employers and employees by ensuring fair treatment, equal pay and transparent policies.
