The UAE has one of the most advanced labour laws in the region, designed to protect both employees and employers while supporting a fair and productive workplace.
As an organization, it is very important to stay informed about the latest changes to ensure compliance, avoid penalties, and build a culture of trust with your workforce. The UAE Labour Law brings several key updates around employment contracts, leave policies, end-of-service benefits, and Emiratisation targets that every HR and business owner should know.
With Yomly, the leading HR and Payroll software in the UAE, stay`ing compliant becomes simple and automated. From managing contracts and leave records to processing payroll and generating MOHRE-ready reports, Yomly helps businesses handle every aspect of HR in line with UAE Labour Law.
We have updated this guide with the latest labour law changes for 2026, ensuring you have accurate and current information for compliance
Understanding the UAE Labour Law
The UAE Labour Law is governed by Federal Decree-Law No. 33 of 2021 and its subsequent amendments, which regulate all aspects of employment across the country. It applies to private sector employees working in both mainland companies and most free zones, except for DIFC and ADGM, which have their own labour regulations.
There are various provisions in the law covering contracts, working hours, salaries, leave entitlements, end-of-service benefits, and workplace rights. Understanding these rules helps businesses operate smoothly and avoid compliance issues.
Key Updates in UAE Labor Laws
To help businesses and HR teams stay compliant, it’s essential to understand the recent amendments introduced under the UAE Labour Law. Here are the key changes you need to know for 2026.
1. Employment Contracts
Under the UAE Labour Law introduced under Federal Decree-Law No. 33 of 2021, all employment contracts in the private sector must be limited-term and cannot exceed three years, although they may be renewed by mutual agreement.
The previous unlimited contract format has been fully phased out. Employers must convert older contracts to limited-term ones in line with MOHRE’s updated rules.
Every contract must clearly state the employee’s job title, salary, benefits, working hours, notice period, and other key terms. Companies are also required to digitally register contracts through the official MOHRE or free zone portals to ensure full compliance.
2. Leave Policies
Several leave provisions have been refined for clarity.
- Maternity leave now extends to 60 days, 45 days at full pay and 15 days at half pay with no minimum service requirement.
- Paternity leave remains available for 5 paid days, which can be used within six months of a child’s birth.
- Study leave grants employees with at least two years of service 10 paid days per year to attend exams or study programs.
- Annual leave continues at two days per month during the first year and 30 days annually thereafter. Carrying forward or cashing out unused leave now requires a written agreement between the employee and employer.
- Sick leave remains structured at 15 days full pay, 30 days half pay, and up to 45 days unpaid.
- Compassionate leave includes 5 days for the loss of a spouse and 3 days for the death of a parent, sibling, grandparent, or grandchild.
Check our detailed guide on Maternity Leave in UAE and Leave Salary Calculation In UAE for a detailed understanding of the leave policies.
3. Emiratisation Targets
In recent years, the UAE government tightened Emiratisation compliance for private sector firms. Companies with 50 or more employees must ensure that at least 1% of their workforce consists of Emirati nationals by mid-2025.
These quotas are part of the national NAFIS program, which aims to steadily increase Emirati participation in private employment. Organizations that fail to meet targets face fines or administrative penalties. Employers must regularly report Emiratisation data to MOHRE and maintain verifiable employee records to demonstrate compliance.
4. Workplace Flexibility
The UAE Labour Law officially recognizes flexible work models, including part-time, remote, freelance, and job-sharing arrangements.
Employees under these models are entitled to the same core protections as full-time staff, calculated on a pro rata basis. Every flexible contract must define working hours, pay structure, benefits, and renewal terms. This update supports the UAE’s goal of improving work-life balance and enabling employers to attract a broader, more dynamic workforce while staying compliant with national standards.
5. End of Service Benefits (EOS)
The calculation method for end-of-service gratuity remains the same:
- 21 days of basic wage for each of the first five years of service.
- 30 days of basic wage for every year beyond that, capped at two years of total wages.
The 2025 amendment clarifies that even in cases of termination for cause, employees retain entitlement to their full accrued gratuity. It also confirms that employees transitioning from unlimited to limited-term contracts must retain previous service duration for EOS calculation purposes.
Companies are encouraged to use approved digital platforms for automated EOS computation and payment tracking.
6. Overtime and Work Hours
The standard working hours remain 8 hours per day and 48 hours per week, reduced by 2 hours per day during Ramadan. Employers may assign up to 2 hours of overtime per day, with the following pay structure:
- 125% of basic wage for overtime on normal days.
- 150% of basic wage for overtime between 10:00 PM and 4:00 AM or on public holidays.
Employers may offer compensatory rest instead of monetary payment if agreed in writing. The total overtime limit is capped at 144 hours over a three-week period, ensuring that employee well-being and labour rights are maintained.
7. Minimum Wage for Emirati Employees (New for 2026)
As of January 1st, 2026, the UAE has introduced a mandatory minimum wage for Emirati employees working in the private sector. This update is closely linked to Emiratisation compliance and applies to eligible organizations across the country.
- Minimum monthly salary set at AED 6,000 for Emirati employees
- Applicable to private sector companies under MOHRE
- Salary adjustment deadline for existing employees: June 30, 2026
- Non-compliance may impact Emiratisation targets and work permit approvals
- Employers must ensure contracts and payroll records reflect the updated wage.
Employee Rights and Employer Obligations
With the evolving UAE Labour Law, both employees and employers have defined rights and responsibilities to ensure fairness and compliance in the workplace. Here are the key rights employees are entitled to and the obligations every employer must follow.
Employee Rights
- Timely and full payment of wages under the WPS system
- Safe and healthy working conditions
- Protection from discrimination and harassment
- Fair termination and notice procedures
- Access to end-of-service benefits and gratuity
- Paid leave as per UAE Labour Law (annual, maternity, paternity, sick)
- Right to obtain employment contracts and documentation
- Equal opportunities and fair treatment
Employer Obligations
- Issue and register MOHRE-compliant employment contracts
- Maintain accurate employee records and salary documentation
- Ensure WPS-compliant payroll processing
- Provide health and safety measures at the workplace
- Adhere to working hours, overtime, and leave rules
- Facilitate end-of-service settlements and final dues
- Comply with Emiratisation targets and reporting requirements
- Communicate terminations and renewals as per law
With Yomly, employers can automate every aspect of HR and compliance from WPS payroll and leave tracking to contract management and EOS calculations.
Yomly’s all-in-one HR and Payroll platform ensures your business stays fully compliant with UAE Labour Law while reducing manual work and errors.
Further Resources:
How to Stay Updated with UAE Labour Law Changes
Staying updated with UAE Labour Law changes is crucial for every HR and business owner to maintain compliance and avoid penalties.
The Ministry of Human Resources and Emiratisation (MOHRE) regularly issues new resolutions, clarifications, and amendments to improve workplace standards and employee protection. These updates can impact contracts, payroll processing, leave policies, and end-of-service calculations.
To stay compliant, organizations should monitor official MOHRE announcements, subscribe to verified legal updates, and conduct periodic HR audits.
Partnering with Yomly makes this process effortless, the platform automatically reflects the latest law changes in payroll rules, leave structures, and reporting formats. With real-time compliance alerts and built-in calculators, Yomly helps HR teams adapt quickly and stay aligned with every new UAE Labour Law requirement.
Simplify Compliance with Confidence
Please understand that while this guide is designed to help you interpret and apply the UAE Labour Law 2026, it does not constitute legal advice, and Yomly is not liable for any decisions made solely based on this content. Labour laws are subject to periodic updates, and organizations should always verify details with MOHRE or legal professionals.
One thing we are sure of is that Yomly is built to make compliance effortless. Trusted by 250+ enterprise clients and used by thousands of employees across the UAE, Yomly automates payroll, leave management, and compliance tracking with complete accuracy. If you are looking for a reliable way to stay compliant, reduce manual work, and streamline HR operations, Yomly is your all-in-one HR and Payroll platform for 2026 and beyond.
