The year 2023 brings with it a series of changes to labor law in the United Arab Emirates (UAE). It is important to note that these modifications will affect both employers and employees in the private sector. Of course, there are some exceptions such as the companies that work in the ADGM and DIFC-free zones. All these changes are thanks to the entry into force of the new labor law in UAE 2023. This introduces interesting news in different aspects that every recruitment agency in UAE must know to be successful.
In this article, we offer you a complete guide with many details about the new labor law in UAE 2023. The purpose of this is that all companies that offer any type of recruitment; learn about the new labor law in the UAE 2023 and all the news it brings. The objective of these reforms is to modernize the labor legal framework of the country, in order to adapt it to the needs of the market. At the same time, they want to improve working conditions and labor rights. Therein lies its importance and, therefore, you will see the main characteristics of the modifications, benefits, and implications of both parties.
Understanding the New Labour Law in UAE 2023: Key Changes Unveiled
Several extremely important events will directly affect the labor market in the UAE. For this reason, knowing about the basic employee rights in the UAE and what companies must do with the new labor law in the UAE is essential. So, what are the new labor laws in UAE, this will be seen below.
Deadline for compliance with the new labor law in UAE: The new Labor law in UAE comes into force in 2022, more precisely in February. Here, private sector companies are required to have their employees have employment contracts with a determined duration. In addition, the deadline for this transition is February 1, 2023. Although the length of the contract is not limited, it must be determined at the time of contracting.
Emiratization: This only applies to those companies in the private sector that have MoHRE registration. At present, this does not apply to those entities that are located in any of the free zones of the UAE. Thus, at least 2% of a company’s employees must be UAE nationals. In addition, this fee will increase by 2% each year until 10% of your employees are from the UAE.
Introduction of the unemployment insurance plan: As of June 30, 2023, employees belonging to the private sector must register in the plan. On the other hand, there is an exception in the companies that belong to a free zone, but this can change. Then each employee must pay AED 5 per month if they earn less than AED 16,000 per month; and AED 10 per month if they earn more than the above-mentioned amount per month.
New Labour Law for Limited Contracts in UAE: What Employers Need to Know
It is important to know the changes in the United Arab Emirates labor law to avoid any legal problems in the UAE. In this way, the new labor rules in UAE eliminate the whole idea of contracts with an unlimited duration. Now, only the issuance of contracts with a fixed duration is allowed. With a deadline of February 2, 2023, employers must convert their employees to fixed-term contracts.
Due to their duration, limited contracts are often referred to as fixed-term contracts. In this way, the period of the contract will coincide with the duration of their residence visa in the UAE that foreigners apply for. Therefore, the duration of your contract can be from 2 to 3 years, since this is the most common option within the country.
If the parties involved want to continue with the employment relationship, they must agree to renew the contract. However, when the employee does not want to continue with this employment relationship, they must deliver a letter of non-renewal to their employer. In this way, the employer will be able to know the situation of the employee and that in this case, a contract renewal will not be essential.
The main difference between restricted and limited agreements is that one has a fixed time and the other is variable. According to the UAE labor law, contracts of limited duration must contain these details:
- The expiration date of the contract.
- When the contract begins.
- What type of job the employee will have?
- Where the job is located
- How much is the compensation?
- The period.
Navigating 2023: What the New Labour Law Means for Employees
With the new labor law in Dubai, some of the work modalities have the following adjustments:
Full Time: This means that you will have to work for an employer for full working hours every day.
Part-time: You work for one or more employers for a specific number of work hours or specific days to work.
Temporary work: It has an execution during a certain period or once the task is finished the contract is terminated.
Flexible work: Working hours and days vary according to the workload and operational and economic variables of the employer.
Foreign employees have access to paid annual leave, bereavement, maternity, paternity, and study leave.
Annual Vacation: For each year of service an employee completes, they can enjoy 30 days of annual vacation.
Maternity leave: When a woman reaches 6 months of pregnancy, by right she has 60 days of paid maternity leave. In this way, for the first 45 days, you will be paid your full salary and for the remaining 15 days, you will be paid half your salary.
Sick leave: By the provisions of Article 31, Paragraph 3, of the Employment Law Dubai; employees have access to 45 days of paid sick leave.
Bereavement Leave and Study: Employees have access to a 3-day bereavement leave. This is if the loss is of a parent, child, grandparent, brother, or grandchild, and if it is due to the death of your spouse, the duration is 5 days. In addition, if an employee is enrolled in an educational institution in the UAE, they can request one study leave per year, if they have worked for the company for at least 2 years.
Exploring Notice Periods: Implications of the New Labour Law in UAE
Notice of termination of the employment contract: Both parties may terminate the employment contract for any reason that is reasonable. To do this, the other party must have the information in writing and the notice period that is in the employment contract must be met. It is important to note that the notice period must have a minimum duration of 30 days and no more than 90 days.
Even if the failure to notify does not affect the other party, the party that missed the notice period must pay compensation. This notice period bonus is this compensation. It is important to note that this compensation must be equal to the employer’s salary during the notice period or the remaining part.
End-of-service benefit payment: A full-time foreign employee who has one year or more of continuous service; may request termination of service benefits at the time your service ends. In addition, the calculation of this is using the base salary, the salary of 21 days for each year within the first 5 years of service.
On the other hand, for each year that exceeds this period, the salary will be 30 days. In addition, the employer has to pay his employee within 14 days after the end of his contract term; your salary and other rights.
Demystifying the New Labour Law: FAQs and What You Should Know
The new UAE labor law offers many benefits for employees. For this reason, it is important to understand it very well and observe everything that is in the new labor law. However, even though you know many details of this new law, many questions arise about some details. Because of this, we will talk to you about this new law and answer some of the most frequently asked questions.
What is the minimum wage in the UAE? For foreigners in the UAE, there is no salary or global minimum wage. On the other hand, the minimum wage or the salary of the nationals of the country will depend on the level of study they have.
What is the work schedule? For the private sector, the standard weekly work hours consist of 48 hours or 8 hours every day. In the case of school and university work weeks, the days are 4 hours in the case of the public sector. In addition, if the job lasts more than 5 hours, the employee can enjoy one or more breaks in the day, and these breaks are not taken into account as working time.
How is overtime paid? In this case, the overtime is at a rate of 125% of the employee’s salary. However, the rate can be 150% when overtime is between 10:00 p.m. and 10:00 p.m. and 4:00 a.m. and days off.
Do I have severance pay? Those employees who have more than 5 years of service will receive one month’s salary.
Do I have health insurance? When working in the UAE, all staff members and their families must have health insurance.
Deciphering the New Labour Law in UAE 2023: A Concise Overview
The new labor law in the UAE has a mix of benefits for both employees and employers. If employers are taken into account, the introduction of a fixed-term contract on a mandatory basis is very beneficial. In this way, employers can get rid of employees who present low performance during their stay in the company.
The new law expands protections against discrimination and prohibits discrimination for any reason. In addition, all employees must have protection against sexual harassment, and verbal, physical, or psychological violence by their peers, supervisor, or employer. Even with the new labor law, employers will not be able to threaten or fire an employee for being pregnant or on maternity leave.
In the new law, you find that trial periods of up to six months are still an option. In this case, you can terminate employment for any reason. Now, the new law restricts flexibility to some extent and requires a minimum of 14 days’ notice when firing a parolee employee.
On the other hand, this new law allows employers to terminate employment before the end of the contract term for a legitimate reason. However, in the new legislation, there is no definition of this legitimate term. In addition, employees can enjoy one day of unpaid leave per week so that they can look for a new job in case the employer has terminated their contract.
In-Depth Analysis: The Significance of Basic Salary in UAE Labour Law
Understanding how to calculate basic salary in UAE labor law is important in order to generate more accurate compensation for employees. In this way, the basic salary is not only the base of your take-home pay, but it will also help you calculate other things. Among them, you find annual vacations and gratuity for termination of service.
Therefore, due to the importance of this one, you cannot afford to make any mistakes. Now, what is the basic salary; simply the contractual amount agreed to pay an employee excluding expenses, allowances, and any other benefits. Thus, each employment contract must specifically contain the amount that the employee will receive in compensation for his service.
The new labor law defines the basic salary as the salary stipulated in the employment contract. In addition, the employee receives compensation for work under his employment contract. This is done on a monthly, weekly, daily, hourly, or piece-rate basis, and does not include any other benefit or subsidy.
For this context, the base salary is the basic remuneration that exists in employment contracts, where there are exceptions to subsidies. For this reason, if you want to start a labor office in Dubai it is important that you know everything established regarding the basic salary. And you also need to know about the uae labour law 2023 to get things better and according to law.
Dubai Labour Office Insights: How the New Law Impacts Business Operations
All the new aspects of the new labor law in UAE 2023 have also had an impact on business operations. In this section, you will see a description of all aspects of the UAE law for employees and how they affect the business activities of the company.
Minimum wage: Currently, there are two types of minimum wage, one for the unskilled and the other for the rest of the employees. In the case of unskilled workers, it is AED 1,000. In addition, they have the possibility of increasing it to AED 1500. For this, the employer must provide transportation and accommodation.
This is a great benefit for commercial activities since there is the option of being able to classify employees into qualified and unqualified ones. Thus, commercial activities have the following division, increasing business performance and productivity.
Equal pay: That is, regardless of whether the employee is a man or a woman, they must have the same salary whenever they do the same job. It is important to note that business owners must avoid any type of discrimination based on gender. This is of paramount importance and has great benefit for business activities. The reason is that, when there is equal pay, women are more motivated and perform their work better.
New work modalities (teleworking): In this type of work modality, the employee performs his tasks from a place other than the work environment. To do this, they use current technological means. Companies can offer teleworking to their employees as a voluntary possibility or as a mandatory measure, depending on the case.
It is important to note that if the employee is going to work using telecommuting, everything is clear in the employment contract. Thanks to this, workers have greater motivation to exercise, which increases commercial activities.
Labour Law in UAE: A Comprehensive Look at Working Hours and Regulations
When working in the United Arab Emirates (UAE), it is extremely important to know the labor law of UAE working hours. The new labor law in UAE 2023 provides clear and specific guidelines on the maximum number of working hours. Of course, taking into account certain exceptions. For instance, business hours during the Ramadan holiday. All employers must be clear that legally; an employer may not require an employee to work more hours than are available.
The first thing will be to talk about the private sector. Article 65 of the new labor law in UAE 2023 says that employees must work a maximum of eight hours a day. In other words, a maximum of 48 hours a week. However, the first exception is that workers in commercial establishments, restaurants, security guards, and other similar workers have the option of extension to nine hours. As long as the Ministry of Labor provides the authorization.
On the other hand, the working day can also be reduced for some workers. In particular, employees who carry out work that is harmful to health or dangerous. It is important to clarify that for this you must have the authorization of the Ministry of Labor and Social Affairs.
The case of public sector employees is similar, but their working hours are seven hours a day. One thing you should know is that government entities do not use labor law. It is important to highlight that Article 65 also establishes that travel time to the workplace is not part of the working day. In addition, employees can take a break after completing 5 consecutive hours of work.
Finally, one of the most important exceptions to Article 65 is the working day during Ramadan. This consists of two hours during Ramadan.
Labour Law UAE Working Hours: Defining Boundaries in the New Landscape
On some occasions, work circumstances may require an employee to work longer than normal hours. These additional hours will be part of overtime. If the employee resorts to overtime, he will receive a higher remuneration. This consists of a remuneration equal to the salary for the normal working day plus an additional 25% of that salary.
If the worker requires to work overtime between 9:00 pm and 4:00 am, the remuneration will be higher. This remuneration consists of the normal salary plus an additional payment equivalent to at least 50% of said figure.
On the other hand, there is real overtime, which may not exceed two hours a day. Except that the work is necessary to avoid serious accidents or substantial losses or to alleviate and eliminate their effects.
In the UAE, Fridays are the normal weekly holidays for all employees, except those receiving daily wages. If workers have to work on a Friday, they will be granted two possibilities of remuneration. The first is that you will have one day off each week to rest. The second is that you will be paid the basic salary corresponding to the normal working day, plus an extra of at least 50% of that salary.
It is important to know that employees cannot work more than two consecutive Fridays. But, there is an exception and this is for workers who have a daily salary. You have to keep in mind that all of the above provision does not apply to all employees, there are some exceptions. For instance, employees with managerial positions, ship crews, and sailors. This is because they work under special service conditions due to the type of work they do.
Labour Law in UAE: Addressing Employee Rights and Labour Rules
The new labor law in UAE 2023, introduces several changes and improvements regarding the rights of employees. Especially those who are part of the private sector. Among the most important aspects of the issues of workers’ rights.
Work modalities: Two new ones are part-time work and teleworking. For this, you must meet some requirements and obtain the approval of the MOHRE.
Notice period in UAE new labor law 2023: With this new labor law in UAE 2023, there is a renewal of the notice period. Previously, there was a notice period for contract termination of 30 days. Currently, it is 14 days and you can send the information in writing or verbally.
New trial period: In the new labor law for limited contracts in UAE there is a change regarding trial periods. Currently, it can be a maximum of 6 months and either party can terminate the contract. This, without prior notice or compensation.
Prohibition of competition: Currently, the prohibition of competition ceases to exist once the contract ends. This is a clause that exists in labor contracts, to prevent the employee from requesting work for the competition. It also prevents the worker from doing any activity to harm the interests of the former company. The new law eliminates this policy unless the written agreement expressly agrees otherwise and certain conditions are met.
Severance pay fund: In this new labor law in UAE 2023, there is a severance pay fund. The financing of this fund is by the contributions of employees and employers. It is important to note that this system replaces the previous compensation for seniority.
Employment Law Dubai: Navigating the New Norms of Employee Benefits
In the new labor law in UAE 2023, the new rules of benefits for employees are established. Among the most important and interesting the following can be highlighted.
Annual paid vacation: All employees have paid annual vacation of at least 30 days. This is for all workers, regardless of the seniority of the employee.
Sick leave: If needed, employees can access up to 90 days of sick leave per year. The pay distribution is full pay for the first 15 days and the following month is half the salary. Also, the last month and a half (45 days) without pay.
Maternity leave: Future mothers can access a leave of 90 days or 3 months. On the other hand, there is also paternity leave. This is a little less, it is a maximum of 10 days with full salary payment.
Indemnity for unfair dismissal: The employee who is fired without justification must be paid the equivalent of three months’ salary. But, to have access to this, the worker must have at least one year of seniority in the company.
Health Insurance: All employers must provide employees with mandatory health insurance. This must cover at least 80% of the medical expenses of the worker and their dependents or family members.
Vocational training programs: From time to time the employer or the government must offer professional training programs to workers. One of the conditions to comply with this is that these courses cannot affect the benefits or salary of the workers.
Prohibition of workplace harassment: The new labor law in UAE 2023 establishes that employees must be protected against any type of harassment. No matter who the bullying comes from. That is superiors, employers, or colleagues.
Exploring Labour Law UAE 2023: Impacts and Considerations for Businesses
Each company has been exposed to the impact of these changes in the new labor law in UAE 2023. This impact depends on each of the different aspects of labor law. In this section, you will see the items that have caused the greatest shock in companies and how this happens.
Review and modify the employment contracts of employees. All companies must review and modify the employment contracts of the company to adapt them to labor law. This establishes that the maximum duration of work agreements must be 5 years.
As a result, employers may have to negotiate new conditions with workers. In addition, they will surely have to review the internal human resources policies.
Adjust business plans and budgets. Companies have to adjust budgets and business plans to incorporate the new unemployment insurance. The new unemployment insurance system will come into force in 2023 and cover 60% of the basic salary of workers. In this case, this means an increase in the company’s labor costs. And not only that but also greater protection for employees in the event of dismissal.
Comply with the new Emiratization requirement. Finally, companies have to comply with the new Emiratization requirement. This establishes that as of January 1, 2023, the company’s payroll must have at least 2% of personnel with Emirati nationality.
As a result, companies have to invest more effort to attract and retain local talent. In addition, strategies should be sought that show greater diversity and inclusion in the labor market.
Labour Office Dubai: Adapting to the New Labour Law Landscape
Currently, thanks to the new labor law in UAE 2023, there are conditions on how offices or work environments should be. In particular, this is due to Article 13 of Federal Decree-Law No. 33 of 2021. About the Regulation of Labor Relations in the Private Sector. It specifies that the employer must provide a safe and ideal work environment for employees. Next, you will see the most important and interesting details of this topic.
The Ministry of Human Resources and Emiratization (MOHRE) and other competent bodies are in charge of all these aspects. That is, they establish the occupational health and safety standards that companies must comply with. In addition, all workers must be provided with the tools, equipment, and clothing necessary to perform the job. Of course, efficient and safe for all employees.
When hiring, employees should be made aware of all potential job hazards. In turn, information must be provided on the preventive measures that they have to follow. On the other hand, employees must have the machinery, facilities, and work vehicles in good condition. In other words, all machinery must meet all safety and technical requirements.
Finally, all employees must have access to immediate medical assistance or first aid, in case of accidents or occupational diseases.
Embracing Change: How Employers Can Comply with the New Labour Law
All these changes indeed imply an adaptation process for employers. That is why, in this section, you will see some strategies so that entrepreneurs can quickly establish the new labor law in UAE 2023.
Promote a culture of non-discrimination in companies in the UAE: The new labor law in UAE 2023, introduces different protections for employees who must comply. The first thing is to provide equal pay to female employees who perform a job similar to that of men. Lastly, employers must protect all workers from violence, and bullying.
To achieve this, employers must instill a culture of non-discrimination. There are different strategies you can use to accomplish this. Among them, running campaigns within the company that send the message of no to harassment. You can do it with posters around the company or through technology. That is, sending awareness messages, photos, or videos.
Comply with occupational safety standards and health standards set by MOHRE: The Ministry of Human Resources and Emiratization (MOHRE) and other competent bodies have created company safety policies. In order to comply with them, certain resources must be implemented in companies. Among the measures that must be followed are the following.
- Provide employees with all tools, equipment, and clothing necessary to perform their jobs safely.
- Inform workers about the potential risks of the job.
- Adopt preventive measures for all high-risk jobs.
- Ensure machinery and equipment are in good condition.
- Comply with all technical and safety requirements.
- Provide employees with medical assistance and first aid for work accidents.
Labour Laws in UAE 2022 vs. 2023: An Evolution in Employment Regulations
Generally, employers and businessmen cannot visualize the changes in the labor law when they are so close. That is why, below you will see a comparison of the labor law of 2022 with that of 2023. For a better understanding, you will see the most relevant aspects and thus understand the evolution of employment regulations.
Employment contract: By 2022, contracts must have a fixed duration and must not exceed five years. In the case of 2023, the same type of contract is maintained. However, a maximum term is established for employers to adapt employee contracts.
Unemployment insurance: In the year 2022, there are no unemployment insurance systems. But, by 2023 there is a new unemployment insurance system; that will cover 60% of the employee’s basic salary.
Emiratization: In the year 2022, there is no Emiratization requirement for companies. However, in 2023 a new emirate requirement is created. This states that at least 2% of a company’s workforce must have Emirati nationality.
Discrimination in the workplace: By 2022, there will be no explicit protection against discrimination based on gender, race, disability, age, or religion. But, by 2023, measures will be established to strengthen protections against bullying, harassment, and discrimination in the work environment. In addition, equal pay is established between women and men in the same jobs.
Rights and benefits: In a nutshell, compared to 2022 the rights and benefits in 2023 are significantly strengthened and improved.
Conclusion
With this article, you were able to see the new labor law amendments for the UAE in 2023. Also, how these new changes in the labor law will affect all employees and employers in the private sector? You address all the novelties that this law introduces. Such as, the establishment of a minimum wage, flexible contracts, security reinforcements, etc.
The changes in this new law are aimed at modernizing the legal framework of the UAE. In this way, they want to adapt it to the needs of the market and improve working conditions. However, it is important to highlight that the parties must follow a new series of obligations and responsibilities.
For this reason, employees and employers must be properly informed of all changes to this new law. Now, you want to know more about the new labor law in the UAE and you do not know where to start. Do you want to know more about a Dubai labor office and do you know who can help you? Here at ConnectStaff, you will find the answers to all those questions.
If you want to have the best advice from experts on this and many other topics, we are the ones for you. In this way, if you want to contract our services, you only have to contact us at the number +971 43 316 688 or by writing to our email contact@connectstaff.ae.
