Offering a competitive salary is crucial in attracting top talent, but it’s not the only thing prospective employees take into consideration when choosing where to work.
In fact, 92% of employees say benefits are important for overall job satisfaction, productivity, and retention, so a generous benefits package can help you stand out from competitors and hire the best people in your industry.
This article will cover employee benefits in the United Arab Emirates (UAE), including the government-mandated benefits and optional add-ons employers can offer to both UAE nationals and expats living in the economic powerhouse of the Middle East.
If you’re hiring or plan to hire remote employees based in the UAE, you’ll need to familiarize yourself with the laws and regulations that govern employment contracts and employee benefits.
The UAE Labour Law (Federal Law No. 8 Organisation of Labour Relations, 1980) was amended by Federal Decree-Law No. 33 in February 2022, which sets out the mandatory benefits employers must offer their employees.
The Federal Decree-Law No. 33 — also known as the New Labour Law — applies to all private companies but is not applicable to the following employees:
Employees in the DIFC and ADGM are exempt from UAE employment laws because the Free Trade Zones operate under their own legal systems and employment regulations that govern everything from the employment of foreigners to minimum wages, health and safety, and contract termination.
Additionally, international companies looking to hire in the UAE must establish a legal entity in one of the Emirates to operate within the relevant legislative framework unless they partner with an Employer of Record (EOR) organization — more on that later.
Now let’s take a look at the mandatory benefits all employers must offer in the UAE.
Employees with more than one year of service are entitled to 30 calendar days of annual leave per year, while those who have been in their job for six to 12 months are entitled to two days for each month worked. Employees can choose when to take time off but must request leave with at least one month’s notice.
It’s important to note that in the UAE, any public holidays or sick leave days that fall within the holiday period are considered part of the annual leave allowance.
If an employee has unused leave days at the end of the entitlement year, employers can decide at their discretion whether to allow them to carry unused leave over into the following year.
Employees are entitled to a maximum of 90 days of sick leave per year, continuously or in parts, as long as the employee provides a medical certificate within three days of stopping work.
When on sick leave, employees receive full pay for the first 15 days, half pay for the next 30 days, and no pay for the remaining 15 days. People on probation don’t receive any pay if they take sick leave during their trial period.
When working overtime, employees receive overtime pay as follows:
The end-of-service gratuity is a statutory monetary entitlement that employees must receive from employers upon the termination of their employment contract, as long as they are eligible for it.
If the employee has been in service for more than one year but less than five, they are entitled to 21 days’ salary for each year of work. If they have been at the company for over five years, they receive 30 days’ salary for each year of work after the first five years.
According to the updated law:
Below is a list of additional benefits that you might want to consider including in your employee benefit plans — although they aren’t required under UAE law, they can make your company a more attractive employer.
Although not technically benefits, it’s important to be aware of the legal protections in place to protect employees in the UAE. They include the following:
Providing a comprehensive and competitive benefits package for your UAE employees requires understanding corporate culture in the UAE, complying with local labor laws, and meeting employees’ expectations — all while staying within the company budget.
If you’re looking for an easy and cost-efficient way to hire employees in the UAE without having to establish a legal entity, consider partnering with an EOR like Remofirst. We take the hassle out of ensuring legal compliance when hiring remote employees so you can focus on the work that matters most.
Check out our UAE country guide to learn more about our services.