As global hiring accelerates, companies around the world increasingly rely on the Employer of Record (EOR) model to engage talent in new markets. The EOR approach simplifies onboarding, payroll, and compliance but it also creates situations where operational expectations in one country must coexist with labor laws in another.
A common challenge arises when a company located outside the UAE hires an employee who lives and works in the UAE through an EOR. While the employee may be integrated into global operations, their employment relationship is fully governed by UAE labor law including working hours, leave entitlements, and national public holidays.
This becomes especially important when global teams are unaware of how UAE holiday regulations impact scheduling and compensation.
Why UAE Labor Law Takes Priority
When an employee is legally employed under a UAE EOR, the following principles always apply:
- They are protected by UAE Federal Labor Law.
- UAE public holidays automatically apply.
- Any work performed on a UAE national holiday triggers holiday overtime entitlements, unless the employment contract clearly sets out a different arrangement that is still legally compliant.
Global employers sometimes expect the UAE-based employee to follow the schedule of:
- Headquarters (often in a different time zone)
- A global company holiday calendar
- The operational needs of a foreign team
However, local labor law overrides foreign working practices, and failing to recognize this can lead to compliance risks and unexpected payroll obligations.
Working on UAE National Holidays: What the Law Says
Under UAE Labor Law (Federal Decree-Law No. 33 of 2021), if an employee works on an official UAE public holiday, they must receive either:
Option 1: A compensatory day off, or
Option 2: Holiday pay, calculated as:
- Basic salary + 50% for daytime holiday work
- Basic salary + 100% for nighttime hours (10 PM – 4 AM)
These entitlements apply automatically unless the employment contract sets out a different, legally acceptable schedule.
For many global companies, this becomes a surprise, especially when local UAE holidays do not align with the company’s home-country holiday calendar.
Where Compliance Problems Usually Occur
We frequently see challenges when:
- Managers in other countries are unaware of UAE holiday laws.
- The offer letter does not clearly state which holiday calendar applies.
- Teams expect the UAE employee to follow a foreign time zone or public holiday schedule without proper documentation.
- Operational demands require work on UAE holidays but the contract does not address this.
In such cases, EORs must default to UAE law, meaning the employee is entitled to overtime compensation or substitute leave, even if the rest of the global team is working normally.
How Global Companies Can Avoid Misalignment
With proper planning, international companies can prevent these issues entirely. The key is transparency and compliance from the start.
1. Define Working Hours & Time Zones in the Offer Letter
Specify clearly:
- Required working hours
- Expected time zone for operations
- Any variations from UAE-standard practices
This ensures the employee understands global expectations upfront.
2. Clarify Which Public Holiday Calendar Applies
Companies have two choices:
A. Use the UAE Public Holiday Calendar (default)
Simple, compliant, and recommended.
B. Use the Company’s Global Holiday Calendar
This is possible only if reflected clearly in the contract and compliant with minimum UAE labor protections.
If it is not stated in writing, the employee legally follows UAE holidays and must be compensated for working during them.
3. Use Contract Amendments When Needed
If an existing employment agreement does not clearly define:
- Holiday schedule
- Time zone
- Working hours
…then a formal amendment should be issued.
Without written clarification, UAE labor law automatically prevails.
4. Train International Managers to Understand UAE Labor Requirements
Most compliance issues are unintentional. Educating managers ensures:
- No accidental scheduling on UAE holidays
- Reduced risk of unlawful overtime practices
- Better planning for global project deadlines
5. Work Closely With Your EOR Partner
A strong EOR partner will support you by:
- Providing advance notice of UAE public holidays
- Advising on schedule planning
- Ensuring any holiday pay is handled correctly
- Guiding contract language to prevent misunderstandings
Proactive communication between the company and EOR is the easiest way to maintain compliance and avoid unnecessary costs.
Conclusion
Hiring globally through an EOR unlocks talent and operational flexibility but it also requires respecting the labor laws of each employee’s location.
For employees legally employed under a UAE EOR:
- UAE national holidays apply by default, and
- Work performed during those holidays triggers mandatory compensation, unless a compliant alternative is clearly written in the contract.
Need Support With Hiring or Compliance in the UAE?
If you are planning to hire, relocate, or expand your team in the UAE, or if you have any questions related to UAE labor law, EOR regulations, working schedules, or compliance requirements, our team is here to support you.
We help global companies navigate the complexities of cross-border employment and ensure full alignment with UAE regulations.
Feel free to reach out to us. Your growth in the UAE starts with compliant and confident hiring.
