Explore the Latest UAE Labour Law 2026

The relationship between employer and employee is crucial, which is why the United Arab Emirates has significantly updated its labour regulations to create a more flexible and secure work environment. The new UAE labour law, officially known as Federal Decree-Law No. 33 of 2021, replaced the old Federal Law No. 8 of 1980, effective from February 2, 2022.

This new law sets out modern rules for private sector employment, affecting everything from job contracts to workplace policies. For both employers and employees, understanding these changes is essential, whether it’s knowing your contract terms or calculating your final dues with our gratuity calculator UAE.

The latest labour law aims to align with global standards and protect the rights of all parties involved. This guide will walk you through the key aspects of the new UAE labour law. I will also explain the important updates in simple terms, so you know exactly what your rights and obligations are.

Every one of the employees in private businesses must now work with fixed-term contracts, but no more unlimited contracts. Private sector companies today also provide numerous sorts of employment, such as remote, part-time, flexible, and temporary positions. The government is pushing companies to hire Emirati nationals using Emiratisation targets, implements sanctions for not achieving Emiratisation targets, and provides a financial backstop for employees who are terminated, because of the introduction of the ILS (Indemnity of the Employment Industry) program.

The emphasis on stricter enforcement and promotion of equal pay and anti-discrimination laws, digitisation of labour services including e-contracts and e-signing of documents, as well as stricter enforcement of WPS (Wage Protection System) in relation to timely payment of wages, will result in an accelerated penalty system for private companies that fail to meet the payroll requirements in a timely manner.

UAE Working Hours

The latest UAE labour law makes the work week more flexible for employees. Your off day doesn’t always need to be Friday, as it can be any day your company agrees to in your employment contract.

If you work extra hours other than normal duty hours (8 hours), there are clear rules for overtime. You can’t work more than 144 overtime hours in 3 weeks, and you get paid extra for it. For your annual holidays, you should use them in the same year. 

According to the new law, you can also agree with your employer to carry unused annual leave or get paid for any unused days based on your basic salary. Employees will get unused annual leave in their full and final settlement.

In most cases (private and public), the workings of the UAE have changed to a five-day working week, which follows the accepted international Mon-Fri work standard; however, the employer’s discretion remains to set the days off in relation to his or her business needs.

The continuing interest in providing flexible working hours, which both the employer and employee may negotiate (at their discretion) to make both employee and employer successful while complying with all laws and regulations.

Allocation of Leaves

The new UAE labour law ensures that employees enjoy their lives outside of the working environment and office politics. To support employees during important life events, the UAE labour law provides several different types of paid and unpaid leave.

Here’s a quick look at the main leave entitlements;

Maternity Leave

UAE’s new labour law provides significant support for working mothers. Female employees are entitled to a total of 60 days of maternity leave. Here’s the breakdown;

First 45 days: You will receive your full salary.

Next 15 days: You will receive your half salary.

After these 60 days, if you or your child has a medical issue related to the pregnancy or birth, you can take an additional 45 days of unpaid leave. You will need a medical certificate or a certified doctor’s prescription to apply for this extra leave.

Special Support: The UAE law also provides extra help for mothers of children with disabilities (referred to as ‘people of determination’). In such cases, you are entitled to an additional 30 days of fully paid leave after your initial maternity leave ends. This can be further extended by another 30 days of unpaid leave.

Mothers who return to work will benefit from the enforcement of a daily break to breastfeed their baby; this has made it easier on the working mother and employer to meet each other’s childcare and work-life obligations.

Sick Leave

Once you have completed your probation period, you are entitled to 90 days of sick leave under the AE in a year if you are unwell. It’s important to inform your employer in writing within 3 days of falling ill and provide a medical report to support your leave application.

The payment for these 90 days is as follows:

First 15 days: You will receive your full salary.

Next 30 days: You will receive half of your salary.

Final 45 days: This period will be unpaid.

Sick Leave Policies are now subject to increased monitoring by employers. Therefore, employees must furnish appropriate medical documentation when taking Sick Leave. Any violation of the Sick Leave laws may lead to employee disciplinary actions pursuant to UAE Labour Laws.

Annual Leave

You are entitled to fully paid annual leave to rest, recharge, and regain energy to work. The number of annual leaves you get depends on how long you have worked for your employer. Here’s the breakdown of Annual Leave;

If you have worked for more than one year, you get 30 days of paid annual leave.

If you have worked for more than six months (but less than a year), you get 2 days of paid leave for every month you have worked.

Parental Leave

To support new parents, the UAE was the first Arab country to introduce parental leave for the private sector! Both mothers and fathers are entitled to 5 working days of paid leave after the birth of their child. This is also called paternity leave.

This leave can be taken consecutively or on separate days, but it must be used within the first six months after the child’s birth. This initiative in the new labour law of the UAE allows parents to spend important time with their newborn baby!

Hajj Leave

The UAE Labour Law respects the religious obligations of employees. To perform the Hajj pilgrimage, you are entitled to 30 unpaid Hajj leave.

A key point to remember is that this is a once-in-a-lifetime benefit; you can only take this special leave once during your entire employment with a single company in the United Arab Emirates. But if your company policy allows for another Hajj, go for it!

Umrah Leave

It is important to know that the UAE labour law does not have a separate provision for Umrah leave in the UAE. This means your employer is not legally required to give you special leave to perform Umrah.

However, many companies are supportive of their employees’ religious practices. You can always request time off for Umrah from your employer. It is up to the company’s internal policy to decide whether to grant this leave as part of your annual leave or as unpaid leave!

Study Leave

The new Employment Act in the UAE supports employees who are continuing their education along with their job. The UAE government encourages employees to enhance their skill set and educational abilities. UAE employees can take special study leave (paid/unpaid, varies company to company), but you must meet a few conditions:

Documentation for examination or school obligations may need to be provided by employees, as employers are starting to align the benefit of Study Leave with performance and skills development objectives.

Leave to Find a Job

If you are serving your notice period, you are entitled to one day of unpaid leave per week to look for a new job.

This will help you attend interviews and secure your next role without having to use your annual leave. To use this leave, you should coordinate with your employer to schedule your day off.

If your contract has been terminated by your employer, you are entitled to one unpaid day per week of your notification period to conduct search activities for employment, which would include going to interviews or seeking new opportunities. 

In order to utilize this benefit, you must inform your employer of your intention to take advantage of this benefit before you take the benefit, and coordinate the timing with your employer. This benefit is not guaranteed if you voluntarily resign and is subject to your Employer’s or company’s Policy Discretion.

Compassionate Leave

The UAE Labour Law provides paid time off, also known as bereavement leave, to support you during the difficult time of losing a family member. The number of days you get depends on your relationship to the deceased. However, here are the terms and conditions for your understanding;

In the case of the death of a spouse, you are entitled to 5 days of paid leave.

In the case of the death of a parent, child, sibling, grandchild, or grandparent, you are entitled to 3 days of paid leave.

This leave is given so you have time to manage personal matters and grieve without worrying about losing your salary.

Contract Termination Rules

Under the new UAE labour law (Federal Decree-Law No. 33 of 2021), the rules for ending a contract are now much simpler. If either you or your employer wants to end the contract, a written notice must be given.

The length of this notice period is simply what is written in your job contract. The only rule is that it must be between 30 and 90 days.

It is important to understand that the old system, which many people still remember, is no longer used.

The old rule was based on your years of service:

• 30 days’ notice for less than 5 years of service
• 60 days’ notice for 5-10 years of service
• 90 days’ notice for more than 10 years of service

Again, remember that this old system has been replaced. Always check your current contract for the correct notice period.

The regulations regarding the enforcement of notice periods have become more stringent. If you do not provide the appropriate notice while terminating your employment, you could be responsible for paying your employer the equivalent number of days in your notice period.

Rules for Contract Suspension

If an employee violates company rules, the employer has the right to temporarily suspend them from work to conduct a proper internal investigation. 

A serious violation could include things like revealing company secrets, causing significant financial loss, or breaking safety rules. During this time, the suspension can last for up to 30 days, and the employee is paid half of their salary. 

However, the latest labour law protects the employee from unfair suspension. If the investigation finds that the employee is innocent in all ways, the employer must pay them the remaining half of their salary for the suspension period.

UAE Gratuity Calculation 2026

Your end-of-service gratuity is a ‘thank you’ payment from your employer for your service. If you have completed at least one year of service, you are eligible for the gratuity payment.

The calculation of gratuity in salary is based on your last drawn basic salary and is split into two parts:

For your first five years of service, you get 21 days’ basic salary for each year.

For any years of service after the fifth year, you get 30 days’ basic salary for each additional year.

To get an exact gratuity figure without any complicated math, you can always use our gratuity calculator tool. As per UAE labour law, it’s important to know that your employer must pay your full and final settlement, including your gratuity, within 14 days of your last working day.

The UAE law is very clear on gratuity payment. Your employer must pay your full and final settlement, including your gratuity, within 14 days of your last working day. Submitting a formal application for gratuity by an employee helps ensure this deadline is met and you receive your dues promptly.

Currency of Salary Payments

The new labour law provides more flexibility when it comes to the currency of your salary. According to the old labour law, employees were paid the FFS amount in the UAE Dirham (AED). Still, as per the new labour law, employers can now pay you in any other currency, such as the Dollar, the Euro, the INR, the PKR, etc., if you both agree to it in the employment contract.

To ensure that employees are paid on time, most companies are required to pay salaries through the Wages Protection System (WPS). This is an electronic system that transfers your salary directly to your bank account. Using the WPS is mandatory, and companies that fail to use it can face fines and penalties.

Workplace Guidelines

The new UAE labour law places a strong emphasis on creating a fair, respectful, and safe work environment for everyone. It strictly prohibits any form of discrimination and harassment in the workplace.

Here are the key protections under the law:

Equal Opportunity: Employers cannot discriminate against people based on their race, colour, gender, height, body, religion, nationality, social origin, or disability. This rule applies to all types of employment.

Equal Pay: The new law ensures that men and women receive equal pay for the same work they do.

Protection for Women: It is illegal and unethical for an employer to terminate a female employee’s contract because she is pregnant or on maternity leave.

The labour law in the UAE also makes it clear that employers are responsible for preventing any form of harassment, bullying, or any verbal, physical, or psychological violence against their employees in the workplace.

Disciplinary Penalties

The UAE Labour Law gives employers the right to apply penalties if an employee breaks the company’s rules. However, these penalties must be fair and can only be given after a formal investigation where the employee has a chance to explain their side.

According to Article 39 of the law, an employer can apply the following penalties, usually in order of seriousness:

Written Notice: A formal letter pointing out the mistake (a verbal warning can also be given).

Written Warning: A more serious formal letter warning the employee.

Deduction from Salary: A deduction of not more than 5 days’ salary in a single month.

Suspension from Work: Suspension without pay for up to 14 days.

Denial of Annual Increment: The employee may not receive their yearly salary increase for one year.

Denial of Promotion: The employee may be denied a promotion for up to two years.

Termination: In cases of serious misconduct, the employer can terminate the contract while still paying the end-of-service gratuity.

It’s important to know that an employer cannot accuse an employee of a violation more than 30 days after it was discovered.

Disciplinary actions must be properly documented in accordance with the company’s policies, as established by the authorities, and must comply with those policies. If you believe your disciplinary action was unfairly imposed upon you, you may submit a complaint to the MOHRE.

Unemployment Insurance Scheme

A major addition to the UAE’s employee support system is the mandatory Unemployment Insurance Scheme, which was introduced back in 2023 to provide a safety net for workers who lose their jobs. 

This scheme gives you a temporary income if you become unemployed, which helps you manage your kitchen income while you look for a new job. It is also known as compensation for the termination of employment in the UAE.

Here’s what you need to know:

Subscribe:  It is mandatory for all employees in the private and federal government sectors to subscribe to this scheme.

Cost: The cost is very low, starting from just AED 5 per month for employees with a basic salary of AED 16,000 or less.

Benefit: If you lose your job, you can receive a cash payment equal to 60% of your basic salary in the UAE, up to a maximum of AED 20,000 per month. This benefit is paid for a maximum of three consecutive months.

Eligibility: The scheme does not apply to investors, domestic workers, temporary contract employees, or employees in free zones.

To be eligible to claim the benefit, you must have been subscribed to the scheme for at least 12 continuous months. This is a crucial step in providing financial security for employees across the UAE.