Why UAE Labour Law 2025 Matters
The UAE’s labor framework, anchored in Federal Decree-Law No. 33 of 2021 and its implementing regulations, continues to evolve in 2025. With enhancements to leave policies, salary protections, and contract structures, both employers and employees need clarity to navigate entitlements and compliance. This guide unpacks the latest developments and day-to-day applications under “UAE Labor Law 2025,” covering everything from leave rights and salary rules to end-of-service calculations and contract reform.
Contracts Reimagined: Fixed-Term, Flexible, Multi-Employer Work
In 2025, fixed-term contracts are the norm in mainland UAE; unlimited contracts are no longer issued. These agreements must clearly state job title, duties, salary breakdown, work location, working hours, and termination clauses. Freelancers and part-timers benefit from part-time and temporary contracts, allowing legal income from multiple employers—provided the correct work permits are secured. Remote and flexible arrangements are also legitimate, but must be formalized in writing, specifying performance indicators, attendance tracking, and equipment responsibilities.
Annual Leave: Accrual, Scheduling, and Pro-Ration
Employees earn 30 calendar days of paid annual leave after completing one year of service. Before reaching that milestone, leave accrues pro-rata; for instance, six months of service yields around 15 days. Employers may schedule leave based on business needs, but should provide reasonable notice and avoid forfeiture. Tracking leave via your HRIS—or, at minimum, signed email records—is vital for dispute resolution.
Maternity and Parental Leave: Rights and Realities
Maternity leave in the UAE typically spans 60 days, often structured as 45 days full pay followed by 15 days at half pay. Additional unpaid extension may be allowed for pregnancy complications, depending on company policy. Breastfeeding breaks post-return are becoming a norm. Parental leave, separate from maternity, grants five working days paid to either parent to support newborn care—traditionally within the first few months after birth.
Sick Leave: Entitlement, Documentation, Limits
After probation, employees are eligible for up to 90 days of sick leave annually: usually 15 days fully paid, 30 days half pay, followed by 45 days unpaid, contingent on medical certification and adherence to absence procedures. Sick leave typically doesn’t accrue during probation, though managers may grant unpaid or annual leave as discretion allows.
Compassionate & Study Leave
Beyond statutory leave, many companies offer 3 to 5 days of compassionate leave for bereavement, depending on the relationship to the deceased. Employees with two or more years of service may also request up to ten days of study leave per year if enrolled in accredited academic programs, pending documentation of registration and purpose.
Salary Structure: Basic vs Total, WPS, and Deductions
A clear basic salary figure is critical—it determines your gratuity and some leave calculations. Allowances such as for housing, transport, and communication form your total salary, which must be itemized in the contract. Most mainland employers must disburse salaries through the Wage Protection System (WPS), which enforces timely, full payment; delays or shortfalls can lead to significant employer penalties. Deductions are only permitted if lawful and authorized—anything else may be contested through MOHRE.
Overtime & Working Hours: Rules and Realities
Standard working hours generally are 8 hours per day and 48 hours per week, though this may vary by sector. Overtime applies beyond these limits and is typically paid at a premium rate. Managers and executives may be exempt. Weekend and public holiday overtime must also be managed per your contract’s defined rest days and MOHRE rules.
End-of-Service Gratuity: Calculations and Alternatives
Upon completing one year of service, expatriate employees are eligible for end-of-service gratuity. The formula typically involves 21 days’ basic wage per year for the first five years, and 30 days per year thereafter, capped at two years’ total salary. Pro-rata calculation applies for partial years. Misconduct or unpaid leave periods can reduce entitlements. Some employers now offer alternative savings schemes, where contributions replace traditional gratuity—always review your jurisdiction and documentation thoroughly.
Termination & Resignation: Process, Notice, and Settlement
Notice periods are usually 30 to 90 days, defined in the contract. If resignation or dismissal occurs, parties must respect these terms—or follow pay-in-lieu rules. Final settlements should include unpaid salary, accrued leave pay, any gratuity entitlement, and repatriation cost (if mandated). Non-compete clauses must be reasonable in scope, and employees are generally entitled to a no-fee service certificate stating dates and job title.
Emiratisation & Unemployment Insurance (ILOE) Updates
In 2025, Emiratisation quotas continue to rise across sectors, targeting national hiring and penalizing non-compliant companies. Additionally, ILOE (unemployment insurance) is now mandatory in many categories—failure to register or contribute can result in administrative action, including visa and renewal restrictions.
Occupational Health & Safety (OHS) Mandates
Safety is paramount; many industries now face strict enforcement on OHS compliance. Accidents must be reported, PPE must be provided, and training and logs maintained. This is especially critical in sectors like construction, logistics, hospitality, and manufacturing.
Free Zone vs Mainland: Legal Differences
This guide primarily applies to mainland (MOHRE-regulated) employees. Free zones like DIFC and ADGM have their own employment laws—different leave entitlements, gratuity structures, and dispute mechanisms. Other free zones may follow MOHRE but could introduce procedural variations. Always confirm your employer’s sponsor jurisdiction before relying on these standards.
Digital Contracts & HR Portals: The New Normal
The UAE continues digital transformation: more employers are using e-contracts, self-service HR portals, and automated notifications via MOHRE and immigration systems. Ensure your contact information is kept current to avoid missing critical employment alerts or renewals.
Compliance Checklist for 2025 Employers
Employers should verify: (i) fixed-term contracts with clear terms, (ii) leave and HR policies, (iii) WPS compliance, (iv) accurate leave records, (v) ILOE enrollment, (vi) Emiratisation tracking, (vii) OHS documentation, (viii) gratuity or savings plan accuracy, (ix) disciplined offboarding, and (x) manager training on 2025 labour rules.
Probation Period Rules in 2025
The UAE Labour Law continues to cap probation at six months, but with clearer notice obligations. Employers must give 14 days’ notice to terminate during probation, while employees intending to join another UAE employer must give one month’s notice. Those leaving the country altogether need 14 days’ notice. These conditions aim to prevent abrupt job changes and protect recruitment investments.
Public Holidays & How They Affect Pay
Employees are entitled to official public holidays announced annually by the UAE Cabinet. If a holiday falls during annual leave, it does not count against leave days. Working on a public holiday generally requires compensation—either with an extra day off or pay at an enhanced rate, depending on the contract and law.
Remote Work & Work-from-Home Policies
While the 2021 reforms recognized flexible work, in 2025 employers are formalizing remote work agreements with clauses on working hours, output expectations, cyber security, and cost responsibilities. These agreements ensure clarity on performance metrics and avoid disputes over availability.
Disciplinary Procedures Under UAE Labour Law
Employers must follow a structured approach when handling misconduct: verbal warning, written warning, suspension (up to 10 days), and possible termination for repeated offences. Documentation is essential—failure to follow procedure can invalidate dismissals and result in claims.
Workplace Harassment & Anti-Discrimination Protections
The UAE Labour Law prohibits discrimination based on race, colour, sex, religion, national origin, or disability. Harassment—whether verbal, physical, or digital—is grounds for employee complaints and possible legal action. Employers are encouraged to have anti-harassment policies and internal reporting mechanisms.
Wage Disputes & How to File a Complaint with MOHRE
In 2025, MOHRE’s smart services allow employees to file salary delay or underpayment complaints via app or website. Cases are often resolved through mediation; unresolved disputes may escalate to court. Timely documentation of payslips and bank transfers strengthens cases.
End-of-Service Savings Schemes vs Traditional Gratuity
Some employers in 2025 are offering defined contribution savings plans (like DIFC’s DEWS model) instead of gratuity. These schemes often invest monthly contributions, giving employees a growing fund over time. Understanding fees, vesting rules, and investment risk is crucial before opting in.
Employee Transfers Between Employers
Switching employers within the UAE requires compliance with notice rules, NOC (if applicable), and proper visa transfer. The law aims to facilitate labour mobility while ensuring neither party suffers financial or operational harm.
Employment of Minors & Youth Employment Rules
Special conditions apply for hiring employees under 18, including medical fitness certification, restricted working hours, and prohibition from hazardous roles. These rules align with UAE’s commitment to protecting young workers.
Part-Time & Freelance Work Opportunities
The UAE continues to encourage skilled freelancers and part-time workers with special permits, allowing professionals to work for multiple clients or employers legally. This is particularly attractive for consultants, creatives, and tech professionals.
Health Insurance Obligations by Emirate
While labour law mandates certain benefits, health insurance is regulated at emirate level—Dubai and Abu Dhabi have strict employer-paid schemes, while other emirates are catching up. Employers must ensure coverage from day one of employment.
Occupational Injury & Compensation
If an employee is injured at work, employers must cover medical expenses and, in cases of temporary or permanent disability, pay compensation as prescribed by law. Proper reporting to MOHRE and insurance providers is required.
Retirement & Pension for UAE Nationals
Emirati employees are covered by the General Pension and Social Security Authority (GPSSA) or emirate-specific schemes. Employers contribute a percentage of salary, while expatriates receive gratuity or savings plan benefits instead.
Employment in Free Zones vs Mainland: Key Case Studies
A comparison of real-life employment disputes and resolutions in mainland vs free zones can illustrate how jurisdiction affects outcomes—valuable for employees choosing where to work.
Labour Dispute Resolution Committees in 2025
These committees are MOHRE’s fast-track mechanism to resolve workplace conflicts without lengthy court processes. Knowing the timelines, procedures, and appeal options can save both employers and employees time and money.
Future Outlook: Expected UAE Labour Law Changes Beyond 2025
Experts anticipate further digitalization of contracts, AI-driven compliance monitoring, possible tweaks to Emiratisation quotas, and broader adoption of savings schemes. Staying ahead of reforms helps businesses remain compliant and employees informed.