United Arab Emirates – New Labor Law will come into effect in 2022.

Mercans, a leading UAE payroll outsourcingPEO/GEO, employee leasingrecruitment and BPO services provider, has published UAE’s payroll outsourcing alert. Subscribe to Mercans’ UAE payroll outsourcing alerts to ensure that you are always up-to-date with the lasted regulatory changes in Jordan labor and payroll compliance requirements.

On 14 November 2021, the United Arab Emirates announced that the Federal Decree-Law No 33 of 2021, which governs employment relations in the private sector, will come into effect on 2 February 2022.

While the full text of the new law has not yet been made available, the following key changes under the new labor law have already been announced and will come into effect in 2022.

Flexible Employment

The key change is the introduction of part-time work, temporary work, and flexible work. This also includes freelancing, condensed working weeks, shared job models, and self-employment.

The shared-job model allows two people to share the same job and split the pay based on an agreement with the employer.

Payment of Salaries

The new law grants companies the flexibility to pay wages in UAE dirhams or in any other currency, according to the agreement between the two parties in the work contract.

Non-Disclosure & Non-Compete

The new labor law permits employers to prohibit the worker from competing with the employer or participate in any competing project in the same sector, if the work entrusted to the worker grants them access the employer’s clients or access their trade secrets — provided that the condition is specified in terms of time, place and type of work to the extent necessary to protect legitimate business interests and the period of noncompetition shall not exceed two years from the date of contract expiry.


Sexual harassment, bullying, or any other type of verbal, physical, or psychological aggression against a worker by an employer, coworkers, or superiors will be clearly illegal under the new law.

The new law outlaws all types of discrimination based on race, color, sex, religion, national or social origin, or handicap that would limit equal opportunity, hinder equal access to or continuance of work, or deprive people of their rights.

The law prohibits employers from withholding official documents such as passports from employees and forcing them to leave the country at the end of their employment contracts.

Paid Leaves

Under the new law, employees will be eligible to the following paid leaves:

  • Employees in the private sector are entitled to one day paid off per week with the possibility of increasing weekly rest days at the company’s discretion.
  • Employees can also receive a range of leave days, including bereavement leave, that ranges between 3-5 days depending on the degree of kinship of the deceased.
  • After completing two years of work term with an employer, workers are entitled to a 10-day study leave per year if they are enrolled in an accredited institution within the UAE.
  • Employees of the private sector are entitled to a parental leave of 5 working days durin the first six months after the birth of the child. Parental leave is a paid leave that can be applied for by both mother and father of the baby.
  • Maternity leave in the private sector is extended to 60 days – 45 days with full wage, followed by 15 days on half pay.
  • New mothers of infants with special needs are entitled to a 30-day paid leave after completing their initial maternity leave period, renewable for another 30 days with no pay.

Mercans’ UAE Payroll Outsourcing Solutions

While Mercans’ UAE Payroll Outsourcing alerts will allow you to stay on top the latest development in UAE’s payroll regulations, you should still get in touch with Mercans’ UAE payroll outsourcing, compliance, PEO/GEO and BPO specialists for a free consultation on setting up fully compliant payroll and HR functions. Better yet, outsource your payroll and HR activities in UAE to Mercans and our UAE payroll outsourcing experts will ensure that your employees will always be paid on time and in accordance with the UAE regulations.

Download PDF: Mercans Statutory Alert New Labor Law will come into effect in 2022