UAE law states that a business license is required for any business to operate in the country. Employees must be sponsored under the appropriate and correct visa in the UAE, either by their employer, if in the mainland, or by the respective free trade zone authority if working for a company in the free zone. Any company set up in the Free Zone or the mainland must have the appropriate business license(s) in order to obtain a visa for its employees. If an employee is found to be living and working in the UAE without a valid work visa, or if a company sponsoring an employee’s visa is not properly licensed, the employee may be asked to leave the country and both the employee and the company may be blacklisted from doing business in the UAE. Nathan HR offers solutions for all the above-mentioned processes. A few things to consider when recruiting in the UAE:

Employment Contract

To obtain visa sponsorship a formal written contract is required to submit along with the application. It is best practice for companies to provide the written contract in both Arabic and English. The contract would usually spell out the terms of the employee’s compensation, benefits, and termination requirements. Employment contracts in the UAE should always state the salary and any compensation amounts in United Arab Emirates Dirham (AED) rather than a foreign currency.

Working Hours in the UAE

In the UAE, the standard working week is Sunday through Thursday – the weekend is Friday and Saturday. According to local labor laws, only Friday is a mandated day off. If circumstances require that an employee works on Friday, he/she is entitled to another day off or to be paid his basic pay for normal working hours plus an increase of not less than 50% of that pay.

The maximum working hours in the UAE are 8 hours a day, or 48 hours in a week. While public employees often work from 7:30 am to 2:30 pm, the normal hours at private companies can vary. During Ramadan, local laws state that working hours must be reduced by 2 hours a day.

Maternity/Paternity Leave in the UAE

Working women with a year of continuous service are entitled to 45 days maternity leave with full pay. (This includes the period before and after the delivery). The maternity leave is granted with half pay if the woman has not yet completed one year of service. She may then extend her maternity leave for a maximum period of 10 days without pay – this can be continuous or interrupted if caused by an illness (in this case a certified doctor’s note is required). Finally, for up to 18 months following her delivery, female employees are entitled to two daily intervals of up to 30 minutes for the purpose of nursing.

While there is no mandated paternity leave under the UAE Labour Law, private companies are encouraged to offer 3 days or more.

Vacation Leave, Sick Leave and Public Holidays in the UAE

Thirty calendar days of vacation is a market norm benefit in the UAE. Vacation leave is often based on length of service. Employees with an organization for a minimum of 1 year are entitled to the entire 30 days. Between 6-12 months the employee is entitled to an annual vacation of not less than two days for each month and under 6 months an employee is not entitled to any vacation.

Sick Leave is provided to an employee after they complete their 3-month probationary period. An employee is entitled up to 90 days of sick year each year. The employer must provide full wage for the first 15 days, followed by half wage for the next 30. The remaining days would be without pay.

Private sector employees are entitled to full pay on official government mandated holidays.

* UAE Labour Law states that employees may be granted a one-time pilgrimage leave of up to 30 days without pay.

Gratuity Pay, End of Service Benefits, and Severance in the UAE

Once an employee who completes one year or more in continuous service is entitled to a severance (sometimes referred to as a ‘gratuity’) at the end of their service. If an employee is terminated, he or she would be entitled to gratuity pay as follows:

–       21 days for services beyond 1 year but less than 5 years

–       30 days per year of service will be awarded for every year of service following the first 5 years.

If an employee under an indefinite employment contract resigns, he or she is entitled to an end of service gratuity as follows:

–       1/3 of 21 days basic salary for between 1 and 3 years of service

–       2/3 of 21 days basic salary for between 3 and 5 years of service

–       21 days for service beyond 5 years

Employment Taxes in the UAE

There are no employer taxes in the UAE, however, we recommend accruing 8.3% of the employee’s compensation as for the End of Service Benefit or Gratuity.

Health Insurance Benefits in the UAE

Dubai and Abu Dhabi have mandated that employers provide health insurance coverage to an employee and his/her spouse and dependants.

Whether you seek to set up a business entity in the UAE or require visas for employees who will be working on projects in the UAE, Nathan HR offers a range of solution to fit your every need. Contact us for more information.