From the towering Burj Khalifa to the serene beaches of Ras Al Khaimah, the United Arab Emirates (UAE) is a destination that blends modern innovation with a rich heritage.
The UAE government’s commitment to fostering a business-friendly environment and the country’s advanced infrastructure, including world-class communication networks and connectivity, creates an ideal climate for businesses seeking to hire top talent in the Middle East.
Key takeaways:
- The United Arab Emirates is a desirable country for companies seeking remote talent. In addition to residents, there is a large base of digital nomads seeking remote work opportunities.
- Before hiring UAE employees, employers need to familiarize themselves with local employment laws to ensure compliance.
- There are multiple ways to pay UAE employees, but one of the easiest ways for most companies is working with an Employer of Record.
Advantages of Hiring in the United Arab Emirates
The UAE is home to entrepreneurs, startups, and industry giants such as Amazon and Microsoft, which have established bases in business hubs such as Dubai and Abu Dhabi, drawn by the region’s rich talent pool and favorable business environment.
Key stats about the UAE include:
- Language: Arabic
- Currency: UAE Dirham (AED)
- Capital City: Abu Dhabi
- Population: 11 Million
- Cost of Living Rank:19th
Strengthening the UAE Workforce through Strategic Investments
The UAE’s commitment to education and training makes it an optimal choice for businesses hiring local remote teams. Approximately 25% of the federal budget is earmarked for education in the UAE.
In addition, foreign university campuses, such as New York University and Paris-Sorbonne University, provide residents with access to high-quality academic programs.
Additionally, initiatives like the Professional and Practical Training Programme prepare young Emiratis for careers in the private sector, ensuring a steady flow of skilled professionals.
The UAE has also become a popular destination for expats attracted by its modern infrastructure and vibrant lifestyle.
Common job sectors for sourcing global talent in the UAE include:
- Technology
- Healthcare
- Finance
- Construction & Real Estate
- Hospitality & Tourism
- Logistics & Supply Chain
Employment Laws: Hiring Compliantly in the United Arab Emirates
Employment Contracts
When hiring in the UAE, it’s essential to understand the two different types of available employment contracts:
- Limited contracts: Fixed-term contracts, usually lasting up to three years, and intended for project-specific or temporary roles
- Unlimited contracts: Open-ended contracts for permanent positions
The Ministry of Human Resources & Emiratisation (MOHRE) requires that employment contracts be written in English and Arabic and match the terms outlined in the offer letter.
Working Hours & Pay
In the UAE, private sector workers usually work eight hours a day, six days per week. During Ramadan, work hours are reduced to six hours per day.
The UAE has no federally mandated minimum wage, but the MOHRE requires monthly salaries to meet basic needs.
Employers can ask employees to work up to an additional two hours of overtime daily, for which employees earn 1.25 times their standard pay. If the overtime falls between 10 p.m. and 4 a.m., the pay jumps to 1.5 times.
Probation Periods
The probation period lasts a maximum of six months and cannot be extended. This allows employers to assess new hires. If an employee is terminated during this time, the employer must provide 14 days’ notice.
Employer Taxes
Employers in the UAE must contribute 12.5% of their Emirati employee’s gross salaries towards social security. This contribution covers basic social security and housing allowances.
Termination Process & Severance Pay
In the UAE, either party may terminate an employment contract for legitimate reasons, such as performance issues or redundancy. The statutory notice period is 30 days.
Employees in the UAE are entitled to severance pay, known as End of Service Gratuity (EOSG), after completing one year of service. The EOSG is calculated as follows:
- 1-5 years: 21 days’ pay for each year
- 5+ years: 30 days’ pay for each additional year
The total severance pay should not exceed two years’ wages.
Paid Leave Laws in the United Arab Emirates
Vacation and Holiday
Employee benefits in the UAE include 30 days of paid annual leave after completing a year of service. If they’ve worked for over six months but less than a year, they accrue two days of leave per month.
Public holidays, observed in both public and private sectors, include:
- New Year’s Day
- Eid Al Fitr (4 days)
- Eid Al Adha (4 days)
- Islamic New Year
- Prophet Mohammed’s birthday
- National Day (2 days)
Sick Leave
Employees in the UAE are entitled to up to 90 days of sick leave per year after completing their probation period as follows:
- First 15 days: Full pay
- Next 30 days: Half pay
- Remaining 45 days: No pay
To qualify for sick leave, the employee must provide a medical certificate within 48 hours of the first day of illness.
Maternity Leave
Pregnant employees in the UAE receive 60 days of maternity leave. The first 45 days of leave are fully paid, while the remaining 15 are paid at 50% of the employee’s standard pay.
New mothers can also take two hours of daily paid nursing breaks for six months upon returning to work.
Paternity Leave
Male employees in the UAE are granted five days of fully paid paternity leave, which they can take within six months of the child’s birth.
This leave can be used continuously or intermittently, allowing fathers flexibility in caring for their newborns.
Why Digital Nomads Love the United Arab Emirates
The UAE’s Digital Nomad Visa scheme allows foreign nationals to live and work in the Emirates for one to two years. As a result, the UAE has emerged as a prime destination for digital nomads seeking a vibrant lifestyle with a cosmopolitan vibe.
With its tax-free income, advanced infrastructure, and many cultural offerings, the UAE provides an exceptional environment for remote workers to thrive.
As one of the fastest-growing tech hubs globally, the UAE offers many possibilities for digital nomads to explore business ventures and connect with fellow expats and residents alike.
How to Pay Remote Workers in the United Arab Emirates
There are several different payment methods available to pay your Emirati workers, although there are factors to take into account when choosing the best option for your company, and your employees.
- Bank wire transfer: While this is a relatively secure method, international wire transfers often include unfavorable exchange rates, bank fees, and slow transfer times.
- Online payment platform: PayPall, Payoneer, Wise, and others accept multiple currencies, a plus. However, the employee needs to withdraw their money to convert it to local currency, and they may be impacted by exchange rate fluctuations and, in some cases, fees.
- Cryptocurrency: Workers can exchange crypto payments for different currencies on a variety of platforms, but it’s not always the smoothest process. Many companies are also unfamiliar with the necessary steps to pay workers in crypto and may hesitate to use this method.
Working with an Employer of Record (EOR) can help streamline the payment process in a more efficient and affordable way. EORs take on all payroll duties — including ensuring that employees are paid on time and in their own currency.
Hire in the United Arab Emirates with Remofirst
Hiring in the UAE can be complex, especially for companies based in another country.
An EOR like Remofirst can manage all aspects of the human resource process for remote employees in the UAE, from onboarding to compliance with local labor laws to payroll and health insurance.
Book a demo with Remofirst today to hire employees in the UAE or one of 180+ other countries.
