Dec 1, 2021 3 min read

United Arab Emirates Payroll Outsourcing Alert

United Arab Emirates – New Labor Law Announced.

A new labour law will, Federal Decree-Law No 33 of 2021 on the Regulation of Labour Relations, will be replacing Federal Law No. (8) of 1980, effective from 1 February 2022.

New Employment Contracts

With the new law brought into effect from 2 February 2022, new employment contracts will need to be drafted by companies in the private sector. Accordingly, the private sector is required to replace all current employment contracts with MOHRE with new employment contracts being updated with law No. 33 of 2021 by 2 February 2023.

Unlimited Term Contracts Abolished

All unlimited term employment contracts must be replaced with fixed-term contracts which must be renewed with the mutual consent of the parties for a similar span of time or less.

Terminations During Probation Require Notice

As per the new law, all terminations during probation periods require 14-day advance notice.

Equal Pay

Article 4 of the new law, states that women have the right to equal treatment which also includes being paid the same as their male counterparts. This is also done regarding women performing the same work of equal value to that of which the male employees are performing to promote fairness and equality.

Non-Compete Restrictions

When signing an employment agreement that contains a non-compete clause, the term and conditions of the non-compete restrictions are enforced, as follows:

Working hours

The worker should not work more than five hours straight without a single break. The break shall not be made in less than an hour and should not be calculated as part of the working hours. In addition, the employee breaks can be regulated by shifts regarding the nature of certain establishments as per the manpower classification specified in the Executive Regulations of this Decree-Law.

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.

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