The United Arab Emirates is implementing important regulation changes this month. Starting February 2nd, 2022, there will be in place a new UAE Labor law. First announced in November 2021, these new regulations will change the way employment operates in the private sector. Consequently, providing options that strengthen employees’ rights.
In this article, you will learn everything there is to know about this new UAE Labor law. How it will align private and public sector benefits and what are the penalties that may be imposed. Ultimately, seeing how it will affect employees and employers alike. Let us take a look:
- What is the new UAE labor law about?
- Why is the UAE labor law important?
- How does this new law protect employees?
- What are the penalties imposed on companies by the new regulations?
- What should you do to remain compliant?
- How can Connect Resources help you?
1. What is the new UAE Labor Llaw about?
In February 2022, a new UAE Labor Law is going to be established. This Federal Law No. 33 of 2021 will replace the current labor law of 1980. This new regulation will apply to companies and workers in the private sector of the United Arab Emirates.
This new legislation implements a great number of unforeseen variations. Due to the details being outsourced to forthcoming executive regulations, it is difficult to predict how certain changes will operate. Nevertheless, alterations to this law will certainly provide a better working environment for employees.
The new UAE Labor Law will be relevant to all current and upcoming employment associations in the private sector onshore in the UAE. Also, it applies to Free Zones that do not count with their labor laws. On the other hand, these new regulations will not apply to employment relations in the Abu Dhabi Global Market or the Dubai International Finance Centre since they have their legislations.
The United Arab Emirates Ministry of Human Resources and Emiratization expresses that this new UAE labor law is a response to the changing workplace atmosphere due to technological developments in a pandemic world. Currently, the Ministry is working on new executive guidelines that will supervise the application of the law.
2. Why is the UAE labor law important?
The induction of this new labor law acts as an instrument to endorse the empowerment and protection of the employees. It also controls individual and collective employment affairs. This new UAE Labor Law’s main objective is to correct the disparity of power between employers and employees.
Also, it intends to prevent unlawful terminations of contracts. And also to supervise certain processes where workers are acknowledged as associates in discussions about their working conditions. It aims to set minimum standards over safety and pay. Besides, it provides changes to other matters such as working hours, public holidays, and vacations.
This new regulation pretends to bring awareness to unfair treatments within companies. It applies to all employees providing services in the UAE, locals and foreigners alike. The labor law provides equal treatment at work, penalizing any type of discrimination against an individual. Providing the right working conditions must be the company’s priority.
In this way, workers need to be aware of their rights, even if their employers do not raise awareness towards labor laws. Being aware of these innovations and any other variations coming in a near future is imperative. Nevertheless, this new UAE labor law aims to increment productivity in companies.
3. How does this new law protect employees?
With the implementation of these changes in the law, employees will be more secure than ever. It will apply to new and old contracts in the private sector of the United Arab Emirates. Now employees will be able to have a deeper knowledge about their rights and learn to identify them.
Workers new protections that apply in the new UAE Labor Law are:
3.1 Choose Work Models
New changes allow workers to choose from different work models such as part-time jobs, where the employee works full-time for a company; and part-time, where individuals work for one or more organizations for a certain amount of hours or days.
In addition, they can choose to work on certain assignments for different companies for a limited time as temporary work or work for flexible hours and days depending on the business needs and workflow of their employer. These new models will provide a boost in productivity for all sectors.
3.2 Changes in Contract Limitations
The new UAE Labor Law insists that unlimited contracts are no longer permitted. Instead, employment contracts are only valid if they do not exceed the mark of three years. Once a contract is over it can be renewed or extended. These extensions and renovations are applicable indefinitely for similar terms.
Companies need to apply the necessary changes to their employees’ contracts before February 1st, 2023. Besides, they will need to accommodate their employment policies according to the new UAE labor law.
3.3 Termination Under Probation
With the new regulations, employers need to notify employees 14 days in advance before terminating their contracts during the probation period. On the other hand, if an employee wants to cease a contract under this period, they need to provide a notice one month in advance.
A worker under a probation period who leaves the United Arab Emirates will not be able to obtain a work permit in the region for a year from the date they decide to leave. Also, if an employer terminates a contract without noticing the employee, they will still have to pay the remaining salary of the probation period.
3.4 Permission for Special Leave
Employees in the private sector can now enjoy a minimum of one day of permission every week. These leaves are to be decided by the employer. Also, they count with a mourning leave of three to five days if the worker, unfortunately, loses a family member.
Other leaves include five-day permission for paternity leave, allowing employees to spend time with their families after a newborn. Maternity leave will also include 45 paid days and 15 half-paid days. Nevertheless, the new regulations do not mention Hajj leave, however, this could be provided along with paid public holidays.
3.5 End-of-service Pay
Under the new UAE Labor Law, any employees working for over a year will be granted severance pay if they decide to leave the company. For example, those working in an organization for up to five years will receive gratuity comprehended of 21 working days of salary for each year of work.
Besides, if an employee is terminated after working more than five years for a company, the gratuity will increase to 30 days of salary for each year of work. This new law also eradicates reductions to severance pay when employees terminate their contracts. Subsequently, they still receive a smaller amount of severance pay depending on their years of service.
3.6 Other Protections
Employers must not intimidate or harass their employees in any situation. Any physical, verbal, or psychological violence against workers by their colleagues or managers will be penalized. Also, discrimination of any kind is completely prohibited. Additionally, companies will have to provide equal pay to male and female employees.
In this way, employers cannot confiscate any official documents from their employees. Furthermore, they should be in charge of any expenses and fees of their workers’ recruitment. Under these new circumstances, employees will not work over five uninterrupted hours without a break.
Employees should not work more than two extra hours from their regular schedule. When working overtime, employers must pay a wage corresponding to their regular hourly pay plus a 25% or 50% increase.
4. What are the penalties imposed on companies by the new regulations?
The new UAE Labor Law will impose new penalties on anyone who violates these regulations. This subsection of the Federal Decree-Law No. 33 of 2021, covers Articles 58 to 64. Penalties for infringing these laws can go from fines to jail time depending on the circumstances. Remaining compliant is still the number one priority for businesses.
For example, if an employer tries to bring a foreign employee to the region with false information and documents, they will have to pay up to AED 100.000 in fines. On the other hand, if a company acquires the services of an employee without the necessary work permits the fine can increase to AED 200.000.
These penalties can also apply for the subsequent offenses:
- Making use of work permits for other purposes than those previously established.
- Closing or ceasing operations of a business without previously noticing the workers.
- Recruiting employees and then leaving them without work.
In the same vein, the new UAE labor law states that if someone abuses or misuses any online credential to log in to the Ministry’s systems will receive a fine of up to AED 1.000.000, plus jail time of a year or more. Depending on the number of violations, fines can go to a maximum of AED 10.000.000.
5. What should you do to remain compliant with the new UAE Labor Law?
This law includes many variations that could be difficult to understand. Therefore, contacting a company specialized in government services will be your best option. A team of experts will help you navigate through these uncharted waters. Besides, having support for these challenging times could be beneficial.
A consultancy agency will provide you with their services to update your employees’ contracts so they do not exceed the three-year maximum. Also, their experts will help you with your HR needs to provide good communication between all parties involved. It is also very important to update or implement:
- References to particular statutory requirements such as sick leave policy or maternity leave.
- Equal opportunities, anti-bullying, and harassment policies.
- Disciplinary policy to reflect updates to rights for severance gratuity, prohibition of discrimination, bullying, and harassment.
These changes will need to be applied under guidance. Companies have until February 1st, 2023 to apply the necessary variations to their employment policies and contracts. Corporations must search for indispensable support from consultancy agencies.
Subsequently, you and a specialized team will discuss the Executive Regulations, this new law, and how will they impact your current employment arrangements. Aligning your company’s policies and remaining compliant under this new Labor Law should be your main priority this year.
6. How can Connect Resources help you?
Connect Resources is the number one Consultancy and Solutions Company in the region. Our company provides services to businesses located in:
- Saudi Arabia.
- Kuwait and many other regions.
Connect Resources counts with a trajectory of 22 years in the market, more than 200 completed projects, and multiple accolades for our hard work. We are the greatest choice to provide business consultation. Allow us to guide you through this new UAE Labor Law implementation process, as well as visa requirements or any other legal query.
We provide our extensive knowledge and our expertise in business consultancy to provide you with the utmost service in the UAE. We dedicate to meeting your highest expectations; you can trust us to deal with any difficulty your company may be going through.
Here at Connect Resources, we are qualified to deal with employment visa outsourcing, so your company will not have to face a lack in your workforce. In the same vein, we are also capable of outsourcing your payroll when necessary. We will provide quality services to help you expand and succeed.
Would you like to discuss the new UAE labor law with our team? If you want to start making changes to your company’s policies you can call us at +97143316688, or send us an email at firstname.lastname@example.org. One of our agents will clear all of your doubts about this new process.
Additionally, if you are an independent contractor looking for a great job opportunity, submit your resume or CV to thetalentpoint.com. Or you can send us an email at email@example.com and we will make sure to review your application.