UAE
Know everything about hiring and compliance in UAE.
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:
- General Overtime: 125% of the hourly rate
- Between 10 pm and 4 am: 150% of the hourly rate
- Rest days and weekends: 150% of the hourly rate
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:
- Payroll cut-off date: 20th of each month
- Payment date: Last day of each month
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.
Frequently asked questions
What is the maternity leave policy in Dubai?
Employees are entitled to 60 days of paid leave. The employee will receive 100% of the salary for the first 45 days and 50% of the salary for the last 15 days, and the employer will be responsible for this pay.
Do male employees have the right to paternity leave in Dubai?
There is no paternity leave currently required by law.
How many sick leave days are employees entitled to in Dubai?
Employees are entitled to sick leave for up to 90 days. To be eligible for sick leave employees must have worked at least three months for the employer following the end of their probation period. This leave is paid by the employer at the following rates: - 0 to 15 days: 100% of base salary by employer - 16 to 45 days: 50% of base salary by employer - 46 to 90 days: 0%
What are the public holidays observed in Dubai?
The UAE celebrates 7 national holidays for a total of 14 days. National public holidays include: • Eid al-Fitr Holiday (5 days) • Eid al-Adha (3 days) • Prophet Muhammad's Birthday • National Day (2 days) • Arafat Day • Islamic New Year • Commemoration Day
What are the legal requirements for terminating an employee in Dubai?
Employers can unilaterally terminate contracts at any time as long as proper legal notice requirements and compensation are followed. Terminations without notice must be for cause. Compliant terminations include: - Voluntarily by the employee - By mutual agreément - Unilaterally by the employer: - Without cause providing notice and required compensation - For cause without notice - Probation period - Objective grounds - Disciplinary dismissal -Performance due to unsuitability for the job - By the expiration of the contract
Can employers have a probation period for new hires in Dubai?
The maximum probation period is six months.
