Hiring Talent And Managing Payroll In UAE

Agreements

• The employee and the employer must formulate a fixed-term labor contract. Full-time, part-time, temporary, flexible, remote, or job-sharing contracts.
• This document shall follow all the norms and define the wages, terms and conditions, controls, and procedures.
• The contract must either be in Arabic or should include an Arabic translation. The part in Arabic will be considered in case of contradictions.
• For court procedures, English is also permitted since January 2, 2023.
• Employees can work for more than one employer based on their visa status.
• Non-compete restrictions up to 2 years from the termination of the contract can be included.

Onboarding Process

• Since most employees in UAE are expatriates, the onboarding process requires the employee to upload documents such as -

  • Passport
  • Residency visa
  • ID cards
  • Next-of-kin and emergency contact details
• The employer should also provide the employee with -

  • a copy of the contract
  • safety codes
  • healthcare details
• The employer must review all the documents uploaded by the employee within 14 days of arrival into the country.

Minimum Wage

Payroll Cycle

Annual Bonus

Health Benefits

• Full medical coverage is provided to all UAE nationals under the respective emirates.
• For resident expatriates, the employer must provide health insurance to the employees. In some emirates, the employer should also cover the employee's family.

Working Hours and Overtime

• Work hours: A typical work day is of 8 hours. The work week may be four and a half or five (Monday to Friday) days with a maximum of 48 hours per week. The work hours are flexible (remote or on-site) and can be set according to company policies.
• Break: One or more breaks of at least one hour per 5 consecutive hours of work must be given. Break time is not considered during working hours.
• Overtime: An overtime of 150% of the daily wage must be given for night and 125% for day-time work. This doesn't apply to shift-based work. Employees working on a day off must be given 150% of overtime pay.

Social Security

Taxes for Employees

Termination

• Either party can send a termination notice to the other for valid legal reasons.
• The termination can be without notice only in certain serious conditions.
• A mandatory notice period of at least 30 days to 90 days must be given according to UAE Labor Law. This applies to both parties.
• The notice period may be reduced by mutual agreement.
• All remaining payments must be completed within 14 days of termination of the contract.

Severance Pay

• Employees who have worked for 1 to 5 years are entitled to a severance pay of 21 days per year worked.
• For more than five years of work, the employee is entitled to 30 days per year worked after the first five years.
• For part-time work, the number of hours per year in the part-time contract is divided by the number of hours per year in the full-time contract and multiplied by 100. This percentage is multiplied by the severance pay in the full-time contract.
• There is no severance pay for less than one year of work.

Employees or Contractors

• UAE's flexible working system treats employees and contractors as different entities.
• Upon misclassification of the two, the employer may be subject to serious penalties.

Final Words