The United Arab Emirates (UAE) has a deep and diverse talent pool, partly thanks to the large population of expatriates who have flocked to cities like Dubai in recent years. However, as in many other regions, the crowded job market means more applicants than open positions, and job seekers often seek remote work arrangements with international firms.
Companies looking to hire talent from the UAE often find the employment rules complex, due to the seven emirates and 45 distinct zones that comprise the country. Each zone has its own regulations regarding taxes, customs rates, and—most importantly—employment laws. While some areas, like the Dubai International Finance Center and the Abu Dhabi Global Market, have their own labor laws, other zones must comply with UAE labor laws.
This complexity can make establishing a business entity to hire talent more challenging than usual. Many companies look to an employer of record (EOR) in the UAE to help solve the problem.
EORs in the UAE
Although using an EOR in the UAE doesn’t eliminate the need to comply with local labor laws, partnering with one allows you to tap into this talent pool without having to worry about legal compliance at every step.
For example, Oyster’s global employment platform makes hiring across borders simple by handling all aspects of employment for you, including:
- Compliance with local laws
- Onboarding
- Payroll
- Benefits
- Time off management
- Offboarding
Talk to one of our advisors today to find out how our global employment platform can help to onboard team members from the UAE without the usual headaches.
A few things to know about hiring in the UAE
Working with an EOR in the UAE helps you navigate the region’s complex labor laws, which cover working hours, leave time, taxes, and more. For example, prospective employers must establish a branch office or another form of formal corporate presence in the country before hiring workers—and this may not be practical without an EOR arrangement. And although English is widely spoken, it’s not the official language, so contracts and other employment documents should be written in Arabic as well and registered with the authorities.
Here are some additional factors to consider before hiring in the UAE.
Fixed-term employment
Only fixed-term employment contracts may be agreed upon between an employer and an employee, with a maximum duration of three years. After that, it may be extended for another fixed term.
Probation and notice periods
The UAE allows a maximum probationary period of up to six months, during which both parties can terminate the employment agreement by providing 14 days’ written notice. However, if the employee terminates employment during probation in order to start another employment in the UAE, a 30-day written notice needs to be provided.
After probation, in principle both parties must provide the other party with at least 30 days’ notice of termination. Employees who have been employed for at least one year are entitled to severance pay based on their basic salary and tenure.
Working hours
The UAE workweek runs from Sunday through Thursday, with Fridays as a statutory day off. Normal work hours amount to eight hours per day, and no longer than five hours without a break. During Ramadan, the standard normal hours are reduced by 2 hours per day with no reduction in pay.
If employees work on Fridays, they receive a compensatory day off or a 50% pay increase for those hours.
Hours worked beyond normal working hours earn overtime at 125% per hour for daytime hours and 150% for overnight shifts (between 10 p.m. and 4 a.m.), with a maximum overtime of two hours per day. However, the total working hours should not exceed 144 hours in a three-week period.
Public holidays
Workers in the UAE receive the following paid public holidays annually:
- New Year’s Day (January 1)
- Eid Al Fitr
- Arafah Day (1 day) and Eid Al Adha (3 days) (Feast of Sacrifice)
- Hijri New Year (Islamic New Year)
- Prophet Mohammed’s birthday
- Commemoration Day
- National Day
If an employee takes scheduled leave before or after a public holiday, they are still paid for the public holiday. If they have to work during a public holiday or while on leave, they receive additional compensation.
Additional leave
In addition to holiday leave, UAE employees are entitled to medical, maternity, and vacation leave. The amount of leave depends on their tenure with the company.
Employees past their probation periods and a further three consecutive months of employment can take up to 90 days of sick leave per year. The first 15 days are paid at 100%, the next 30 days are paid at 50%, and the final 45 days are unpaid.
Women can take up to 60 days of maternity leave, 45 days at 100% pay and 15 days at 50% pay. The UAE does not require employers to provide paternity leave, but both parents may take 5 days of paid parental leave.
Employees accrue vacation leave time at a rate of two days per month after six months of service. After a year, employees are entitled to 30 days of vacation annually.
Health insurance
Only Abu Dhabi and Dubai require employers to provide health insurance for their employees. All emirates offer some form of health insurance coverage, but policies and costs vary.
Taxes
The UAE is mostly tax-free, but the rules vary depending on whether you hire UAE locals or expats. In principle, there are no employment-related taxes, such as income taxes. Social security contributions are only obligatory for employees who are UAE nationals.
Get help hiring in the UAE
Hiring staff in the UAE allows you to expand your access to a talented and diverse workforce, but it’s not without its challenges. Let Oyster help you navigate the global hiring process and stay compliant so you can focus on other priorities.
About Oyster
Oyster is a global employment platform designed to enable visionary HR leaders to find, engage, pay, manage, develop, and take care of a thriving distributed workforce. Oyster lets growing companies give valued international team members the experience they deserve, without the usual headaches and expenses.
Oyster enables hiring anywhere in the world—with reliable, compliant payroll, and great local benefits and perks.
