In the UAE, expatriates do not have a legally stipulated minimum wage. However, for nationals, the minimum wage depends on their educational level, with high school graduates earning AED 4,000 and university graduates earning AED 5,000.
In Dubai, certain benefits are mandatory for all employees, including health insurance and gratuity payment. Additionally, non-managerial positions are entitled to overtime payment for hours worked outside of the standard work hours. Employees are limited to a maximum of 2 hours of overtime per day or 144 hours over a 3-week period. The overtime pay rates are as follows:
Legally, employees are not entitled to receive bonuses. However, employers can choose to give voluntary bonuses, which will be taxed as part of the employee's salary.
In Dubai, employers usually handle payroll on a monthly basis, and many companies adhere to the following schedule:
Employees in Dubai are not subject to income tax. However, some employees may be required to make social security contributions.
In the UAE, employees who are terminated, except under Article 120 of the Labor Law, are entitled to receive severance pay. The severance pay is calculated as follows: 21 working days of salary for each of the first 5 years of service and an additional 30 working days per year of service beyond five years, with a maximum of 2 years' worth of compensation.
The notice period for termination ranges from a minimum of one month to a maximum of three months, depending on mutual agreement between the employee and the employer. Contracts must be in English, although bilingual contracts are also acceptable. They must be in written form and signed by both parties.
A contract in the UAE must contain essential details, including the employee's name, start date, employment duration, job description, and termination conditions.
Employees on fixed-term contracts should not exceed a duration of three years, with the possibility of extension for an additional three years. Employers have until Feb. 2, 2022, to transition their employees onto new contracts.
Backdating of contracts is strictly prohibited, and the maximum probationary period for new employees is limited to six months.