UAE Labour Law Update 2027: Key Changes & Rules

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Table of Contents

• UAE Labour Law 2027: Key Changes at a Glance
• 1. Employment Contracts
• 2. Probation Period
• 3. Working Hours, Breaks and Overtime
• 4. Leave Entitlements
• 5. Salary Payment and the Wage Protection System (WPS)
• 6. Notice Periods and Termination
• 7. End-of-Service Gratuity and Final Settlement
• 8. Equal Pay, Discrimination and Harassment
• 9. Penalties and Labour Disputes
• 10. Unemployment Insurance (ILOE)
• 11. Emiratisation
• 12. Health Insurance
• What Employers Should Do for 2027
• Need Help Staying Compliant With UAE Labour Law?
• FAQs on UAE Labour Law 2027

Last updated: 3 November 2026 | Applies to: UAE mainland and most free zone private-sector employers

The UAE Labour Law for the private sector is Federal Decree-Law No. 33 of 2021 on the Regulation of Employment Relations, in force since 2 February 2022, with its executive regulations in Cabinet Resolution No. 1 of 2022. It has been amended since then, most recently by Federal Decree-Law No. 9 of 2024. It applies to onshore employers and most free zones. The DIFC and ADGM have their own employment laws.

For 2027, the core entitlements (contracts, working hours, leave, notice and gratuity) are unchanged. The recent changes have focused on enforcement: higher fines, a faster disputes process, stricter salary payment rules under the Wage Protection System (WPS) from 1 June 2026, and the AED 6,000 minimum salary for Emiratis from 1 January 2026. This guide covers the rules employers and HR teams need to apply in 2027.

UAE Labour Law 2027: Key Changes at a Glance

1. Employment Contracts

• Every employee must have a written, fixed-term employment contract registered with MoHRE. Unlimited contracts are no longer allowed, and the deadline to convert them has passed.
• Following the 2023 amendment, there is no maximum contract term. Contracts can be renewed for the same or a different period, and renewals count as continuous service.
• If both parties continue working after the contract expires, the contract is treated as extended on the same terms.
• Recognised work models include full-time, part-time, temporary, flexible, remote and job-sharing.

2. Probation Period

• Probation can last up to 6 months.
• The employer can end employment during probation with at least 14 days’ written notice.
• An employee who wants to move to another UAE employer during probation must give at least one month’s notice. An employee leaving the UAE must give at least 14 days’ notice.
• Rules apply on recovering recruitment costs when an employee leaves during probation to join another employer, unless agreed otherwise.

3. Working Hours, Breaks and Overtime

• Normal hours: up to 8 hours a day or 48 hours a week, reduced by 2 hours a day during Ramadan.
• Breaks: no more than 5 consecutive hours without a break, with breaks totalling at least one hour.
• Overtime: up to 2 hours a day, and total hours cannot exceed 144 every three weeks.
• Overtime pay: basic hourly wage plus at least 25%, or at least 50% between 10 pm and 4 am (except shift workers).
• Rest days and public holidays: a substitute day off, or the wage plus at least 50% of the basic wage.
• Midday break: outdoor work under direct sun is banned from 12:30 pm to 3 pm between 15 June and 15 September each year.

Also read: Overtime Calculation in UAE

4. Leave Entitlements

Also read: Leave Salary Calculation in UAE

5. Salary Payment and the Wage Protection System (WPS)

Under Ministerial Resolution No. 340 of 2026, in force since 1 June 2026, private-sector salaries are due on the first day of each month for the previous month. Payment after that date is treated as late. An employer is treated as compliant if it pays at least 85% of total wages due on time, but employees can still claim the balance.

Late payment triggers escalating measures: reminders from the second day, a payment warning by the fifth day, possible suspension of new work permits, administrative fines from the eleventh day, and automatic labour disputes for larger employers from the sixteenth day. Serious or repeated cases can lead to asset attachment, travel bans and referral to the Public Prosecution.

6. Notice Periods and Termination

• Notice period: at least 30 days and no more than 90 days, as agreed in the contract, for either party after probation.
• Pay in lieu: the party that does not give notice must pay the wage for the notice period.
• Dismissal without notice: allowed only in the cases listed in Article 44, such as serious misconduct or assault, after an investigation.
• Arbitrary dismissal: if an employee is dismissed for filing a genuine complaint or lawsuit, the court can award compensation of up to three months’ wage.
• Protected periods: an employee cannot be dismissed during annual leave, and a female employee cannot be dismissed because of pregnancy or maternity leave.
• Non-compete: a non-compete clause can last up to two years after the contract ends and must be limited in place and type of work.

7. End-of-Service Gratuity and Final Settlement

• Foreign employees with at least one year of continuous service receive 21 days’ basic wage for each of the first five years and 30 days’ basic wage for each year after that, up to a maximum of two years’ wage.
• There is no reduction for resignation.
• All final dues, including gratuity, must be paid within 14 days of the end of the contract.
• Employers can instead join the voluntary alternative end-of-service savings scheme under Cabinet Resolution No. 96 of 2023.

Also read: Final Settlement and End-of-Service Benefits in the UAE

8. Equal Pay, Discrimination and Harassment

• Discrimination based on race, colour, sex, religion, national or social origin, or disability is prohibited.
• Women must receive the same wage as men for the same work or work of equal value.
• Sexual harassment, bullying and any verbal, physical or psychological violence at work are prohibited, whether by the employer, managers or colleagues.

9. Penalties and Labour Disputes

• Fines for serious violations, such as employing workers without a permit or fictitious employment, range from AED 100,000 to AED 1,000,000, multiplied by the number of workers affected.
• MoHRE decides labour claims worth up to AED 50,000, and its decisions can be appealed to the Court of First Instance.
• Employees can bring a claim within two years of the end of employment.

10. Unemployment Insurance (ILOE)

• Subscription is mandatory for eligible private-sector and federal government employees.
• The premium is AED 5 a month for employees with a basic salary of AED 16,000 or less, and AED 10 a month above that.
• After at least 12 months of subscription, an employee who loses their job can receive 60% of their basic salary for up to three months, subject to a monthly cap.
• Employees who do not subscribe face a fine of AED 400.

11. Emiratisation

• Private companies with 50 or more employees must increase the share of Emiratis in skilled jobs by 2% a year, in two half-yearly steps.
• Emiratis in the private sector must earn at least AED 6,000 a month from 1 January 2026.
• Check MoHRE’s announcements for the 2027 targets and deadlines.

12. Health Insurance

Since 1 January 2025, employers in every emirate must provide health insurance for private-sector employees before their residence visa is issued or renewed.

What Employers Should Do for 2027

• Review contract templates, probation clauses, notice periods and non-compete terms.
• Set the payroll cycle so salaries reach employees through WPS by the first day of each month.
• Check leave policies and gratuity calculations against the law.
• Confirm Emirati salaries meet the AED 6,000 minimum and plan for the 2027 Emiratisation targets.
• Keep records of hours, overtime, leave and warnings to defend any dispute.

Need Help Staying Compliant With UAE Labour Law?

Our payroll services in the UAE handle WPS salary processing, leave and overtime calculations, gratuity and final settlements, so your business stays compliant with every 2027 requirement.

FAQs on UAE Labour Law 2027

Sources:
MoHRE – Federal Decree-Law No. 33 of 2021 and its amendments

M. A. Farahat – ACPA, CFE, CICA

Research and Publications Department
Payroll Middle East
Tel: +971 4 2500251 | Email: sales@payrollmiddleeast.com