Quick Answer
UAE labour law for mainland private sector employers is governed by UAE Federal Decree-Law No. 33 of 2021, effective February 2, 2022. All contracts must be fixed-term (maximum 3 years). Probation maximum is 6 months. Gratuity accrues at 21 calendar days of basic salary per year for the first 5 years under Article 51. WPS salary payment is mandatory. Emiratisation penalty: AED 108,000 per unfilled position per year in 2025, rising to AED 120,000 from 2026.
Contents — UAE Labour Law Hub
Federal Decree-Law No. 33 of 2021 · Effective February 2, 2022
Who This Law Covers
UAE Federal Decree-Law No. 33 of 2021 Regulating Labour Relations (the New Labour Law), which replaced Federal Law No. 8 of 1980 effective February 2, 2022, governs all onshore UAE private sector employment. MoHRE (Ministry of Human Resources and Emiratisation) administers and enforces it. DIFC entities follow DIFC Employment Law No. 2 of 2019. ADGM entities follow ADGM Employment Regulations 2019. All other free zones apply this law unless their authority issues specific overrides.
Contract Types and Duration
Article 8 of Federal Decree-Law No. 33 of 2021 abolished unlimited-duration contracts from February 2, 2022. Every mainland UAE employment contract must now be fixed-term with a maximum duration of 3 years. Employers and employees may renew fixed-term contracts by written mutual agreement. Existing unlimited contracts had to be converted to fixed-term by February 1, 2023.
| Contract Type | Status Under FL 33/2021 | Maximum Duration | Article |
|---|---|---|---|
| Fixed-term | Required for all new hires | 3 years per term | Article 8 |
| Unlimited (open-ended) | Abolished from February 2, 2022 | Not permitted | Article 8 |
| DIFC indefinite contract | Permitted — DIFC Employment Law No. 2 of 2019 | As agreed | DIFC law |
Probation Period Rules — Article 9
The maximum probation period is 6 months under Article 9. Probation is optional — the contract must state the duration if included. Employers may not extend probation beyond 6 months. During probation, either party may terminate with 14 days written notice.
Notice Period Requirements — Article 43
| Situation | Minimum Notice | Maximum Notice | Article |
|---|---|---|---|
| During probation — employer terminates | 14 calendar days | As contracted | Article 9 |
| During probation — employee leaves UAE | 14 calendar days | As contracted | Article 9 |
| During probation — employee joins UAE employer | 1 month | As contracted | Article 9 |
| After probation — both parties | 30 calendar days | 90 calendar days | Article 43 |
End-of-Service Gratuity — Article 51
Gratuity accrues at 21 calendar days of basic salary per year for the first 5 years of service, and 30 calendar days per year from year 6 onward. The calculation base is the last drawn basic salary only — never total package. Minimum qualifying service: 1 full year.
Daily Rate = Monthly Basic Salary ÷ 30
Tier 1 (Years 1–5): Daily Rate × 21 × years served
Tier 2 (Year 6+): Daily Rate × 30 × years served
Total Gratuity = Tier 1 + Tier 2 (not to exceed 24 months of basic salary)
Use the interactive gratuity calculator and see worked examples at three salary levels →
Leave Entitlements Summary
| Leave Type | Entitlement | Pay Rate | Article |
|---|---|---|---|
| Annual leave (12+ months service) | 30 calendar days per year | Full basic salary | Article 29 |
| Annual leave (6–12 months) | 2 calendar days per month | Full basic salary | Article 29 |
| Sick leave — first 15 days | 15 calendar days | Full salary | Article 31 |
| Sick leave — next 30 days | 30 calendar days | Half salary | Article 31 |
| Sick leave — remaining 45 days | 45 calendar days | Unpaid | Article 31 |
| Maternity leave | 60 calendar days (45 full + 15 half) | Full then half | Article 30 |
| Paternity leave | 5 working days | Full salary | Article 30 |
WPS Payroll Compliance
The Wage Protection System (WPS) requires all mainland UAE employers to pay salaries through a Central Bank UAE-approved bank or exchange house by the last working day of each calendar month. Non-compliance results in work permit processing bans and escalating MoHRE sanctions.
Double Penalty Risk: Employers non-compliant with WPS cannot register Emirati hires with NAFIS. WPS violations therefore compound into Emiratisation quota failures — triggering both WPS sanctions and the AED 108,000 per-slot Emiratisation penalty simultaneously.
Emiratisation Quota Obligations
| Company Size | Obligation | Annual Target | 2025 Penalty / Unfilled Slot |
|---|---|---|---|
| 50+ employees (all sectors) | 2% annual increase in Emirati workforce | 10% by 2026 | AED 108,000 |
| 20–49 employees (14 MOHRE sectors) | Sector-specific targets | Per MoHRE schedule | AED 108,000 |
| Under 20 employees | No mandatory quota | N/A | N/A |
From 2026, the penalty rises to AED 120,000 per unfilled Emirati position per year. NAFIS provides employer incentives of up to AED 8,000 per month per Emirati hired.
Free Zone vs Mainland — Key Differences
| Factor | Mainland UAE | DIFC | Other Free Zones |
|---|---|---|---|
| Governing law | FL 33/2021 | DIFC Employment Law No. 2 of 2019 | FL 33/2021 (typically) |
| Contract type | Fixed-term only (max 3 years) | Fixed or indefinite | Fixed-term only |
| Gratuity model | Lump sum (Article 51) | DEWS monthly contribution | Lump sum (Article 51) |
| WPS compliance | Mandatory | Separate framework | Generally mandatory |
| Emiratisation quota | Mandatory (50+ employees) | Exempt | Exempt |
| Dispute forum | MoHRE + UAE Labour Courts | DIFC Courts (English) | MoHRE + UAE Labour Courts |
Complete UAE Labour Law Guide Index
UAE End-of-Service Gratuity 2025
Interactive calculator + 9 worked examples at three salary levels. Article 51 formula, resignation vs termination, DIFC DEWS comparison.
UAE Labour Law Hiring Rules 2025
5-step compliance checklist: work permit, contract registration, health insurance, WPS enrolment, Emiratisation.
UAE Probation Period Rules
Article 9 rules: 6-month maximum, notice periods, leave accrual, worked termination cost examples.
Cost of Hiring an Employee in UAE
Full employer cost model at three salary levels. Visa, insurance, gratuity accrual, leave payout — all itemised.
UAE Work Visa Sponsorship Cost 2025
MoHRE permit, ICP visa, Emirates ID, medical test, health insurance — total first-year cost per employee.
UAE Non-Compete Clause 2025
Article 10: 3 required elements, 2-year maximum, MoHRE enforcement and DIFC comparison.
UAE Annual Leave Rules 2025
Article 29: 30 days after 1 year, payout formula, employer scheduling rights, worked examples.
Free Zone vs Mainland Hiring UAE
Full comparison: governing law, gratuity, WPS, Emiratisation, non-compete, and dispute forum.
WPS Payroll Compliance UAE 2025
Wage Protection System: how it works, deadlines, sanctions, partial salary rules, DIFC exemption.
UAE Fixed-Term Contract 2025
Article 8: 3-year maximum, renewal rules, early termination costs with gratuity worked examples.
UAE Maternity and Paternity Leave 2025
Article 30: 60 days maternity, 5 days paternity, nursing breaks, termination protection, employer cost model.
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Frequently Asked Questions
Which law governs UAE mainland private sector employment in 2025?
UAE Federal Decree-Law No. 33 of 2021 Regulating Labour Relations governs all mainland UAE private sector employment. It replaced Federal Law No. 8 of 1980 effective February 2, 2022. MoHRE administers and enforces it. DIFC uses DIFC Employment Law No. 2 of 2019. ADGM uses ADGM Employment Regulations 2019.
Are unlimited-duration employment contracts still valid in UAE in 2025?
No. Article 8 of Federal Decree-Law No. 33 of 2021 abolished unlimited-duration contracts from February 2, 2022. All new contracts must be fixed-term with a maximum 3-year duration. Pre-2022 unlimited contracts had to be converted to fixed-term by February 1, 2023.
What is the Emiratisation penalty for UAE private sector employers in 2025?
AED 108,000 per unfilled Emirati position per year in 2025, rising to AED 120,000 per position from 2026. Cabinet Resolution No. 18 of 2022 sets the quota obligations. Companies with 50 or more employees must increase their Emirati workforce by 2% per year to reach 10% by 2026.
Do DIFC employees follow the same UAE labour law as mainland employees?
No. DIFC employees follow DIFC Employment Law No. 2 of 2019. ADGM employees follow ADGM Employment Regulations 2019. Most other free zone employees follow Federal Decree-Law No. 33 of 2021 unless their authority issues separate regulations.
What is the maximum probation period under UAE labour law?
6 months under Article 9 of Federal Decree-Law No. 33 of 2021. Employers may not extend it beyond 6 months, even by mutual agreement. During probation, either party may terminate with 14 days written notice.