Employment law advice UAE in 2025 is centered around Federal Decree-Law No. 33 of 2021. The legal landscape has shifted significantly, mandating fixed-term contracts and introducing more flexible work models. Whether you are an employer or an employee, staying compliant with these modern standards is essential to prevent labor disputes and ensure professional stability.
Core Legal Framework
Most private-sector employment in the UAE (excluding DIFC and ADGM) is governed by the federal labor law. The law prohibits forced labor, discrimination, and the illegal retention of personal documents like passports. It aims to balance productivity with the physical and mental well-being of the workforce.
Contracts and Work Models in 2025
- Fixed-Term Mandate: Unlimited contracts are no longer permitted. All employees must be on fixed-term contracts (typically up to 3 years), which are renewable upon mutual agreement.
- Flexible Work: The law recognizes six distinct work models: Full-time, Part-time, Temporary, Flexible, Remote work, and Job-sharing.
- MOHRE Registration: Every contract must be written and registered with the Ministry of Human Resources and Emiratisation (MOHRE).
Working Hours and Overtime
The standard working week for the private sector is a maximum of 48 hours (8 hours per day). During the holy month of Ramadan, these hours are reduced by two hours daily for all workers. Overtime is capped at two hours per day and must be compensated at 125% of the basic hourly rate (or 150% for nighttime hours between 10 PM and 4 AM).
Leave Entitlements
In 2025, employees are entitled to several types of paid leave:
- Annual Leave: 30 calendar days for each year of service.
- Maternity Leave: 60 days total (45 days at full pay and 15 days at half pay).
- Parental Leave: 5 working days for either parent within 6 months of the child’s birth.
- Compassionate Leave: 5 days for the death of a spouse; 3 days for other first-degree relatives.
- Sick Leave: Up to 90 days per year (15 days full pay, 30 days half pay, and 45 days unpaid).
Probation and Termination Rules
The probation period is capped at six months. Under the 2025 rules, either party wishing to terminate the contract during probation must provide at least 14 days’ written notice. For post-probation termination, the notice period usually ranges from 30 to 90 days as per the contract terms.
End-of-Service Gratuity
Foreign workers who complete at least one year of continuous service are entitled to a gratuity based on their final basic salary:
- 1 to 5 years: 21 days’ basic salary for each year of service.
- More than 5 years: 30 days’ basic salary for each year after the first five.
The total gratuity amount cannot exceed two years’ total wages. All payments must be settled within 14 days of the contract termination.
Employment Law Advice for 2025: Practical Tips
- For Employees: Always ensure your offer letter matches the MOHRE-registered contract before signing. Keep a digital record of all pay slips via the Wage Protection System (WPS).
- For Employers: Update your internal HR handbooks to include the mandatory 2025 grievance and disciplinary policies, especially if you have more than 50 employees.
Frequently Asked Questions (FAQ)
1. Are unlimited contracts still valid in 2025?
No, all unlimited contracts should have been converted to fixed-term by the end of 2023. Any remaining must be updated immediately to avoid penalties.
2. Can my employer keep my passport?
No. Passport retention is strictly illegal in the UAE. Employers found doing so face significant fines.
3. How much is the fine for labor law violations?
Fines range from AED 5,000 to AED 1,000,000 depending on the severity of the violation, such as illegal recruitment or non-payment of wages.
4. Can I work for two employers at once?
Yes, under a Part-time or Flexible work contract, provided you obtain the necessary work permit from MOHRE.
5. What is the deadline for paying the final settlement?
Employers are legally required to pay all end-of-service entitlements within 14 days of the last working day.
