UAE Employment Legislation Changes 2024
Businesses in the UAE will need to be ready to implement these new regulations for their employees in 2024
The UAE has implemented significant amendments to its labor law in 2024, reinforcing its commitment to creating a balanced and equitable working environment. Here’s a breakdown of the most notable updates and their implications:
Expansion of Emiratisation Targets for Smaller Companies (20-49 Workers)
Starting in 2024, companies with 20 to 49 employees will also be subject to Emiratisation requirements. By the end of 2024, these companies must hire at least one Emirati. This requirement expands further in 2025, requiring two Emirati hires.
The sectors targeted under this mandate include key industries such as information technology, finance, real estate, education, healthcare, transportation, construction, and hospitality. Companies that fail to meet these targets will face penalties: an annual AED 96,000 fine for not hiring one Emirati by 2024, and AED 108,000 if two Emiratis are not hired by 2025.
Establishments with 50 or more employees are now required to increase Emiratisation by 2% annually for skilled jobs, aiming for a 10% total Emiratisation rate by 2026.
These updated regulations form part of the UAE’s larger strategy to boost local talent in the private sector while promoting a more sustainable and diverse workforce. By expanding the scope of Emiratisation and introducing stricter compliance measures, the UAE continues its focus on creating greater employment opportunities for Emiratis, particularly in private sector roles.
Stricter Penalties for Violations of UAE Labor Laws
The UAE Government has issued a Federal Decree-Law amending specific provisions of the Federal Decree-Law Regarding the Regulation of the Employment Relationship, known as the “UAE Labour Law” The new decree sets forth stringent fines for employers who violate employment laws. Fines range from AED 100,000 to AED 1 million for employers who:
• Hire workers without the proper permits.
• Bring workers into the UAE and fail to provide employment.
• Shut down a business without settling workers’ rights.
• Misuse work permits.
Additionally, penalties apply to the illegal employment of minors, with guardians also held accountable under these laws.
Combatting Fictitious Employment and Emiratisation
A key focus of the new decree is addressing fictitious recruitment and fraudulent Emiratisation. Employers found guilty of falsely claiming the employment of Emiratis or other workers to bypass regulatory provisions will face fines between AED 100,000 and AED 1 million. This penalty increases based on the number of workers involved in the fraudulent activity.
The amendments also give the Ministry of Human Resources and Emiratisation (MOHRE) the authority to initiate criminal proceedings in cases of fictitious employment. However, employers can settle these cases before court proceedings if they pay 50% of the specified fine and return any financial incentives received for these fictitious employees.
Salary Continuation During Disputes
One of the standout features of the new amendments is the inclusion of salary continuation during disputes. The Ministry of Human Resources and Emiratisation (MOHRE) now mandates that employers continue to pay employees for up to two months while a dispute is being resolved. This provision is crucial for employees’ financial stability during prolonged disputes and underscores the UAE’s focus on fair labor practices. If disputes are not resolved within 14 days, MOHRE refers the case to a competent court for further action.
Overtime Regulations
Employers may request workers to work overtime, provided that the extra hours do not exceed two hours per day. If employees are required to work beyond regular working hours, they are entitled to compensation based on their basic salary. This overtime pay includes an additional 25% of their normal wage for the extra hours worked. If overtime occurs between 10 PM and 4 AM, the additional pay increases to 50%, though this rule excludes workers on rotating shifts.
Should employees be required to work on their designated day off, as per their labor contract or company regulations, they are entitled to either a compensatory day off or additional compensation. This would be their normal wage plus 50% of that amount, ensuring fair compensation for time worked outside of standard schedules.
Update to Employment Contracts (Article 8)
Under the new regulations, all employment contracts must now be fixed-term. This transition from unlimited contracts aims to offer greater clarity and structure in employment relationships. The contracts can be renewed upon mutual agreement, ensuring flexibility for both parties. The original contract period contributes to the employee’s total service. If work continues after contract expiry without renewal, it’s considered/assumed extended.
Probation Period Notice
The probation period guidelines have been refined, emphasizing clearer communication between employers and employees. Employers must provide at least a 14-day notice if they wish to terminate an employee during probation. Similarly, employees who intend to leave must provide the same notice. If an employee resigns to join another company within the UAE during this period, they are required to give one month’s notice. Employers may seek compensation if employees leave during probation and rejoin elsewhere within three months.
Introduction of Flexible and Part-Time Work
The UAE has continued its shift toward modern work arrangements by formalizing flexible, part-time, and temporary work contracts in 2024. Previously, employment in the UAE was primarily restricted to full-time positions. While part-time employment was introduced in 2019, the 2024 legislative reforms significantly expand the range of work models available. These reforms now allow employers to hire for temporary, flexible, remote, and job-sharing roles. This development provides employees with more flexibility in negotiating their work hours, while ensuring that all employment types, regardless of the arrangement, come with the same entitlements and protections as traditional full-time roles.
Legal Enforcement of MOHRE Decisions
MOHRE’s decisions are now legally enforceable without the need for prolonged legal procedures. Recognized as a “writ of execution,” this change empowers the ministry to swiftly enforce its rulings, enhancing the efficiency of the labor dispute process.
Streamlined Labour Disputes: Claim Value Limits
To simplify dispute resolution, MOHRE has categorized labor disputes based on monetary value. Disputes involving claims of up to AED 50,000 will be resolved directly by MOHRE, with higher-value claims requiring court intervention. This aims to streamline processes and ensure quicker resolutions for lower-value claims.
Statute of Limitation for Labor Claims
A clear statute of limitation has been established, requiring employees to file any labor claims within one year. Failure to do so results in a loss of the right to sue, regardless of the nature of the claim.
Dismissal and Termination Procedures
The 2024 amendments introduce clear procedures regarding employee termination:
1. Fixed-Term Contract Dismissal: Employers can dismiss employees on fixed-term contracts with the same notice periods as unlimited-term contracts. This standardization simplifies termination processes for both types of employment contracts.
2. Summary Dismissal: The grounds for summary dismissal have been expanded to include situations where employees abuse their position for personal gain or fail to comply with contractual obligations by working for another employer without permission. Employers are required to follow proper procedural safeguards, including conducting investigations and issuing written warnings, before proceeding with termination
3. End-of-Service Gratuity: Even in cases of summary dismissal, employees retain their right to an end-of-service gratuity, which is calculated based on their period of service.
Unlawful Termination
If termination is found unlawful, employees are entitled to up to three months of compensation. Employers must settle gratuity payments within 14 days of termination.
Enhanced Employee Benefits and Leave Entitlements
Several new employee benefits have been introduced to improve work-life balance and job satisfaction:
1. Maternity Leave: Maternity leave has been extended to 60 days, with the first 45 days paid in full and the remaining 15 days at half pay. Additionally, employees dealing with pregnancy-related health issues are entitled to an extra 45 days of unpaid leave.
2. Bereavement Leave: Employees are now entitled to three days of bereavement leave following the death of close family members
3. Parental Leave: New parents can take five days of parental leave within six months of their child’s birth.
4. Study Leave: Employees who have worked for their employer for at least two years are entitled to ten days of study leave for exams.
Anti-Discrimination, Harassment, and Bullying Protections
The new law strengthens anti-discrimination provisions by prohibiting discrimination based on sex, race, religion, social origin, or disability. Article 14 also prohibits workplace harassment, bullying, and violence, aiming to create a safer and more respectful work environment.
Abolition of Forced Labor
The updated law further reinforces ethical employment practices by explicitly abolishing forced labor. Employers cannot impose work against an employee’s will or terminate a woman’s contract due to pregnancy, marking a significant step toward humane labor standards in the UAE.
How Beyond Borders HR Can Help You
These 2024 employment legislation changes for the United Arab Emirates can be challenging for employers to process independently. Beyond Borders HR, a global HR consulting firm, stands ready to assist businesses in understanding and implementing these changes effectively. With our extensive expertise in global HR practices, we ensure that your organization stays compliant with the evolving regulatory landscape. Reach out to Beyond Borders HR for tailored solutions, expert guidance, and seamless integration of these legislative updates into your HR policies and practices. Our team is dedicated to empowering your business with the knowledge and support needed to thrive in this dynamic regulatory environment.
