UAE Labour Law 2026: The Complete Guide for HR Managers
Federal Decree-Law No. 33 of 2021 has completely changed the job market in the UAE. HR managers and business owners in Dubai and the rest of the Emirates need to know about these changes to avoid fines and keep their employees happy.
This guide breaks down the key regulations regarding contracts, leaves, overtime, and gratuity under the new law.
1. Employment Contracts
The biggest change in the new law is the removal of “Unlimited Contracts.”
Fixed-Term Contracts: All employees must now be on fixed-term contracts (usually 2 or 3 years).
Probation Period: Maximum of 6 months. A 14-day notice is required if the employer wishes to terminate during probation.
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2. Working Hours & Overtime Rules
- Standard Hours: 8 hours per day / 48 hours per week.
- Overtime Calculation:
- Regular Overtime: Basic Salary + 25% extra.
- Night/Friday Overtime: Basic Salary + 50% extra (between 10 PM and 4 AM).
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3. Leave Entitlements (Sick, Annual, Maternity)
| Leave Type | Duration & Pay Rule |
| Annual Leave | 30 days fully paid per year (after 6 months of service). |
| Sick Leave | 1st 15 days: Full Pay, Next 30 days: Half Pay, Next 45 days: No Pay |
| Maternity Leave | 45 days: Full Pay, Next 15 days: Half Pay |
| Parental Leave | 5 working days (for both father and mother). |
| Bereavement | 3 to 5 days depending on the relationship. |
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4.End of Service Gratuity
The new law has unified the gratuity calculation, removing the reduction for resignation.
- Less than 1 year: No gratuity.
- 1 to 5 years: 21 days of basic salary per year.
- Over 5 years: 30 days of basic salary per year.
How to Calculate:
It is crucial to use the Basic Salary only (excluding allowances). Also, days of unpaid leave must be deducted from the service period.
🧮 Try It Yourself: Don’t guess the numbers. Use our Free UAE Gratuity Calculator 2026 to get an instant, accurate estimate.
5. Disciplinary Actions & Fines
Employers have the right to impose penalties for violations, ranging from a written warning to dismissal with notice. However, salary deductions for penalties cannot exceed 5 days’ pay per month.
6. Conclusion: Staying Compliant
Following UAE Labour Law is mandatory, not optional. While this guide provides an overview, managing these rules manually for a growing team is risky.
TrueBays StackHX is purpose-built for UAE compliance. We handle the laws, the math, and the WPS files so you don’t have to.
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