The Complete Guide to UAE Labor Laws and Employer Violations to Avoid  

Running a business in the Emirate can be challenging when it comes to understanding UAE labour law. Delaying one salary payment or miscalculating overtime can result in fines of up to AED 1 million. 

In 2024, the Ministry of Human Resources and Emiratisation conducted 688,000 inspections. They recorded 29,000 violations across private companies. If you employ people in the UAE, you need to know what breaks the law; it’s not optional anymore. 

This checklist shows you the most common employment mistakes, the fines you’ll pay under UAE labour law punishment and penalties, and how to keep your company compliant with clear solutions to avoid them. 

Violation 1: Late or Non-Payment of Wages 

Between January to October the UAE authorities caught 2,973 wage non-payment cases and sent them all to Public Prosecution. 

What UAE labour law says: Employer must pay salaries through the Wage Protection System (WPS) if you have 10+ employees. You need to pay 75% of your workforce through WPS and submit Salary Information Files (SIF) on time. 

The Violation: 

• Missing WPS payment deadlines 

• Paying less than 70% of staff through the system 

• Not submitting SIF files on time 

• Delaying salaries beyond contract dates 

Penalties: 

• AED 5,000 to AED 100,000 for WPS violation 

• AED 100,000 to AED 1 million for serious wage violations 

• Work permit suspension 

• You must pay employees for up to 2 months during disputes resolution 

How to follow the law: 

1. Register with an approved WPS agent. 

2. Set up automated payroll linked to WPS. 

3. Submit SIF files before each payment cycle. 

4. Keep a UAE-registered corporate bank account. 

5. Pay salaries on the exact date in the contract. 

6. Store payment records for at least 2 years. 

Violation 2: Passport Confiscation 

Between January and October 2022, workers reported 178 passport confiscation cases. Authorities settled 132 cases and prosecuted the rest. 

What UAE labour law says: It is illegal for an employer to hold employee passports. In some region 2002 Ministry of Interior decree makes this clear. Only official authorities with a court order can do this.  

The Violation: 

Keeping employee passports for any reason except temporary visa processing. 

Penalties: 

• AED 10,000 to AED 20,000 fine 

• Up to 3 years imprisonment 

• Extra penalties if workers file formal complaints 

How to follow the law: 

• Return all passports immediately after visa stamping. 

• Only hold passports during active visa processing (new visa, renewal, cancellation). 

• Set up a check-out system with written receipts if temporary holding needed. 

• Get written consent for any temporary holding. 

• Train HR staff on passport retention rules. 

Violation 3: Charging Recruitment Fees to Workers 

Between January and October 2022, two cases went to the Public Prosecution where employers deducted recruitment fees from wages. 

What the UAE labour law says: Article 6 of UAE’s Federal Decree-Law No. 33 of 2021 states that employers cannot ask workers to pay for recruitment or placement costs. The law clearly says that employers must pay for all recruitment expenses. 

The Violation: 

• Charging workers for visa fees, work permits, or medical tests. 

• Deducting recruitment costs from salaries. 

• Making workers pay agency fees. 

Penalties: 

• Up to AED 1 million in fines 

• Recruitment agency licence suspension or cancellation 

• Up to AED 100,000 for deducting fees from salaries 

How to follow the law: 

1. Pay all visa fees yourself. 

2. Cover all work permit costs 

3. Pay for medical examinations 

4. Buy employee flight tickets. 

5. Cover all recruitment agency charges 

6. Work only with MOHRE-approved agencies 

7. Write in contracts that workers pay no fees. 

8. Never deduct recruitment costs from wages. 

Violation 4: Incorrect Overtime Payment 

Overtime payment rates as per the official UAE Labour Law (Federal Decree-Law No. 33 of 2021): 

Type	Rate
Regular overtime (hours beyond 8 hours/day or 48 hours/week)	125% of basic pay (i.e., basic + 25%)
Night work overtime (between 10 pm- 4 am)	150% of basic pay (i.e., basic + 50%)
Work on rest day (weekly day off)	150% of basic pay (or a substitute rest day)
Work on public holiday	150% of basic pay (i.e., basic + 50%)
Normal baseline working hours	Up to 8 hours/day or 48 hours/week
Maximum overtime	Generally, 2 hours/day; total hours not to exceed 144 hours over any 3-week period

What UAE labour law says: Standard work hours are 48 hours weekly (8 hour daily). During Ramadan, this drops to 36 hours weekly (6 hours daily). Overtime cannot exceed 2 hours per day. 

The Violation: 

• Not paying overtime correctly 

• Exceeding 2-hour daily overtime limit 

• Calculating overtime on total package instead of basic salary 

• Not getting employee consent for overtime 

Penalties: 

• AED 100,000 to AED 1 million in fines 

• Business licence suspension for repeat offenders 

• Mandatory labour law compliance training 

How to follow the law: 

1. Install digital time-tracking systems. 

2. Limit overtime to 2 hours daily maximum. 

3. Calculate overtime using basic salary only. 

4. Pay overtime at correct rates (125%, 150%, or base + 50%). 

5. Get written employee consent for overtime. 

6. Document all overtime hours. 

7. Run monthly overtime payment audits. 

Violation 5: Fake Emiratisation 

Between mid-2022 and November 2023, 1,267 Emiratis were found in fake positions. In April-May 2024, MOHRE fined 1,202 companies, with one paying AED 10 million for 113 fake positions.  

UAE Emiratisation 2025 requirements: 

Company Size	Requirement	Monthly Fine/Penalty
20-49 employees (in 14 targeted sectors)	Hire 1 Emirati by end 2024 and 2 Emiratis by end 2025	Case-specific
50+ employees	Emiratisation rate in skilled roles must reach 7% by June 2025, 8% by December 2025, and expected to rise toward 10% by end 2026	AED 9,000 per month for each unfilled Emirati role
All companies under quota	Emiratis must be employed in real, skilled positions with genuine work, fair pay, and career growth. Token or fake hiring is prohibited.	Enforcement actions such as licence suspension or government-portal blocking for non-compliance

What UAE labour law says: Private-sector companies must employ UAE nationals in genuine skilled positions and meet annual Emiratisation targets. Non-compliance triggers monthly fines or fixed annual penalties and potential administrative sanctions. 

The Violation: 

• Hiring Emiratis on paper only to meet quotas 

• Creating fake positions with no real work 

• Not providing proper training or assignments 

• Paying below minimum requirements (AED 4,000 for skilled workers) 

Penalties: 

• AED 20,000 to AED 100,000 per fake employee 

• AED 100,000 to AED 1 million for serious violations 

• Criminal charges under 2024 amendments 

• Courts order you to return government incentives 

• Partial or complete ban on hiring workers 

• Business licence revocation in extreme cases 

How to follow the law: 

1. Create genuine job roles with real responsibilities. 

2. Provide actual work assignments. 

3. Run proper training programmes. 

4. Pay competitive salaries (minimum AED 4,000 for skilled positions). 

5. Keep attendance records. 

6. Track performance reviews. 

7. Work with NAFIS programme for legitimate support. 

8. Emiratisation rate in skilled roles must reach 8% by December 2025. 

Violation 6: End-of-Service Gratuity Non-Payment 

End of service gratuity is the mandatory payment from the employer to the private sector employee upon termination of the employment provided they have completed 5 years with the company. 

What UAE labour law says: Workers who complete at least 1 year get gratuity when they leave. They must be paid within 14 days of contract termination. 

Gratuity calculation: 

Service Period	Payment
First 5 years	21 calendar day’s salary per year
After 5 years	30 calendar days salary per year

The Violation: 

• Not paying gratuity within 14 days 

• Calculating incorrectly (including allowances) 

• Counting employment periods wrong 

• Disputing amounts without proper documentation 

Penalties: 

• Heavy administrative fines 

• Trade license suspension 

• Restrictions on hiring new employees 

How to follow the law: 

1. Calculate using basic salary. 

2. Verify total service duration accurately. 

3. Pay within 14 days after termination. 

4. Provide written calculation breakdown. 

5. Keep payment confirmation records. 

6. Consider optional savings scheme for alternative arrangement. 

7. Important: Use basic salary only exclude allowances, bonuses, and benefits. 

Violation 7: Workplace Discrimination and Harassment 

Between January and October 2022, authorities recorded 2 sexual harassment cases (likely underreported). 

What UAE labour law says: Article 4 of Federal Decree-Law No. 33 of 2021 bans discrimination based on race, colour, sex, religion, national origin, social background, or disability. Article 14 bans all workplace harassment including sexual harassment, verbal abuse, physical violence, and psychological intimidation. 

The Violation: 

• Paying different wages for equal work based on protected characteristics.   

• Refusing to hire based on race, religion, gender, or disability.   

• Treating employees differently in promotions or benefits.   

• Creating a hostile work environment for certain groups. 

• Sexual harassment of any form.   

• Verbal abuse or threats.   

• Physical violence.   

• Psychological intimidation or bullying.  

Penalties: 

• AED 5,000 to AED 1 million depending on severity   

• Up to AED 10,000 fine and/or up to 1 year imprisonment for harassment   

• Criminal charges in serious cases   

• Higher penalties for repeat offences   

How to follow the law: 

1. Write clear anti-discrimination and anti-harassment policies.   

2. Pay equal wages for equal work regardless of protected characteristics.   

3. Run regular diversity and harassment prevention training.   

4. Set up multiple confidential reporting channels.   

5. Investigate complaints quickly and fairly, within 48 hours where possible.   

6. Document all hiring, promotion, incidents, and responses.   

7. Take disciplinary action against violators.   

8. Protect whistleblowers from retaliation.   

Violation 8: Health and Safety Breaches 

In 2024, authorities found 12,509 companies violating health and safety standards. Recent accommodation inspections flagged 352 violations. 

What UAE labour law says: The employee must be provided the safe working conditions, proper training, personal protective equipment, and adequate worker accommodation that meets licensing standards. 

The Violations: 

• Inadequate ventilation and air conditioning in the workplace 

• Wrong storage of flammable materials 

• Poor sanitation and cleanliness 

• Not providing PPE 

• Unlicensed or substandard worker accommodation 

• No heat stress protection during summer 

Penalties: 

• AED 10,000 per case 

• Operations suspension 

• Criminal charges in severe cases 

How to follow the law: 

1. Run quarterly safety audits. 

2. Provide proper PPE to all workers. 

3. Ensure adequate ventilation, lighting, and sanitation. 

4. Run regular safety training programmes. 

5. Keep emergency response procedures updated. 

6. License all worker accommodations properly. 

7. Implement heat stress protection (May-September). 

8. Store flammable materials correctly. 

Violation 9: Maternity Leave Violations 

What UAE labour law says: Female employees get 60 calendar days maternity leave: first 45 days at full pay, next 15 days at half pay. They also get two 30-minute nursing breaks daily for 18 months after delivery. 

Additional provisions 

• Extra 45 days unpaid for pregnancy/childbirth illness (with medical certificate). 

• Extra 30 days paid + 30 days unpaid for sick/disabled child. 

• Complete job protection during maternity leave. 

The Violation: 

• Refusing to grant maternity leave 

• Paying less than legally required during leave 

• Terminating employment during pregnancy or maternity leave 

• Denying nursing breaks 

• Not holding position for employee’s return 

Penalties: 

Counts as arbitrary termination under Article 47. Employee can claim compensation and file complaints with MOHRE. 

How to follow the law: 

1. Grant maternity leave when requested (with 30 days’ notice). 

2. Pay full salary for first 45 days. 

3. Pay half salary for next 15 days. 

4. Allow two 30-minute nursing breaks daily for 18 months. 

5. Hold employee’s position during leave. 

6. Never terminate due to pregnancy or maternity leave. 

7. Process additional leave requests with proper documentation. 

Violation 10: Paternity Leave Violations 

What the UAE labour law says: Male employees get 5 working days of fully paid paternity leave. They must take it within 6 months of child’s birth. Weekends and public holidays don’t count towards the 5 days. 

The Violation: 

• Refusing paternity leave requests 

• Counting weekends as part of the 5 days 

• Not paying full salary during paternity leave 

• Creating company policies that override legal rights 

Penalties 

Employee can file complaint with MOHRE and claim unpaid leave as wage violation. 

How to follow the law: 

1. Grant 5 working days paternity leave. 

2. Pay full salary for all 5 days. 

3. Allow leave within 6 months of birth. 

4. Require birth certificate as documentation. 

5. Don’t count weekends or public holidays in the 5 days. 

6. Update company policies to match legal requirements. 

Violation 11: Employing Workers Without Valid Work Permits 

In 2024, authorities recorded 20 violations involving recruitment activities without licence between January and November. 

What the UAE labour law says: All workers must have valid work permits before starting work. You cannot employ anyone without proper authorisation. 

The Violation: 

• Hiring workers before work permit approval 

• Continuing employment after permit expiry 

• Not renewing permits on time 

• Using workers from other companies without proper transfer 

Penalties 

• AED 50,000 per worker minimum 

• Up to AED 200,000 for repeat violations 

• AED 100,000 to AED 1 million for serious cases 

• Trade licence suspension 

How to follow the law: 

1. Verify work permit status before hiring. 

2. Track all permit expiry dates. 

3. Renew permits 30 days before expiry. 

4. Complete visa processing before work starts. 

5. Work only with licensed recruitment agencies. 

6. Keep updated records of all permits. 

7. Run monthly permit status audits. 

Violation 12: Contract Violations 

The new 2024 rules require all contracts to be fixed term with a maximum duration of three years. A minimum 30-day notice is mandatory even for summary dismissals. Labour claims can now be filed up to two years after termination, doubling the previous one-year period. Additionally, MOHRE decisions involving amounts under AED 50,000 are immediately enforceable without court intervention. 

What UAE labour law says: All employment relationships need written contracts. Maximum term is 3 years (renewable). Employer must register all contracts with MOHRE. Unlimited contracts are no longer valid; you must convert them to fixed term. 

The Violation: 

• Not providing written contracts 

• Using unlimited term contracts 

• Not registering contracts with MOHRE 

• Terminating without proper notice (minimum 30 days) 

• Dismissing employees for filing complaints 

• Operating outside licensed business activities 

• Registering employees without genuine contracts 

Penalties: 

• AED 100,000 to AED 1 million depending on violation 

• Wrongful termination compensation: up to 3 months’ salary 

How to follow the law: 

1. Provide written contracts in Arabic or bilingual. 

2. Convert all unlimited contracts to fixed term. 

3. Register all contracts with MOHRE. 

4. Give minimum 30 days’ notice for termination. 

5. Document grounds for termination thoroughly. 

6. Never terminate for filing complaints or pregnancy. 

7. Ensure business activities match trade licence. 

8. Create genuine employment relationships only. 

How can you report violations or get guidance? 

MOHRE runs 330 guidance centres across the UAE. They serve 2.8 million workers. In 2023, they ran over 49,000 orientation workshops in 15 languages. More than 2 million workers attended. 

In the first half of 2025, MOHRE conducted 285,000 inspections and found 5,400 labour law violations. These included delayed or unpaid wages, fake Emiratisation practices, operating outside licensed activities, and registering employees without valid contracts. 

Conclusion 

The UAE Labour Market saw remarkable growth in 2024, with the workforce increasing by over 12% and private sector companies expanding by more than 30%. This rapid growth has naturally brought greater attention from regulators. MOHRE carried out almost 700,000 inspections last year and recorded around 29,000 violations. With penalties now two to five times higher across many categories, enforcement is stricter than ever. Non-compliance can be costly, both financially and reputationally.   

Yet, staying compliant under UAE labour law doesn’t have to be difficult. Automate your payroll and time-tracking systems, keep accurate employment records, and train your management team regularly. When in doubt, seek expert guidance and keep an eye on MOHRE’s latest announcements to stay ahead of changes.   

Employment law in the UAE is designed to protect both employers and employees. Following it isn’t just about avoiding UAE labour law punishment and penalties; it’s about building a trustworthy, resilient business that attracts and retains great people.  

The government’s message is clear: compliance is no longer optional, and the real question for every company is how quickly it can put its house in order.