MOHRE Labour Law Updates 2026 — What UAE Employers Must Know

Staying compliant with MOHRE labour law 2026 is a business-critical priority. The UAE's Ministry of Human Resources and Emiratisation (MOHRE) has issued new Ministerial Decrees, expanded Emiratisation mandates, and tightened the Wage Protection System (WPS) under Federal Decree-Law No. 33 of 2021. This guide covers every key change — plus the content gaps most competitors miss — so you can stay compliant, avoid fines, and keep your workforce on solid legal ground.

Applies to: Private-sector employers on the UAE mainland. Free zone employers should see the Free Zone vs. Mainland section below.

What Changed in 2026: The MOHRE Update Overview

Key regulatory shifts effective in 2026:

• WPS Phase II full rollout — all private-sector employers, regardless of size, must now process wages through MOHRE-approved WPS channels
• Emiratisation expansion — companies with 50+ employees in 14 strategic sectors face higher quarterly targets with monthly fines of AED 8,000 per unfilled position
• AI-assisted MOHRE inspections — real-time cross-referencing of WPS data, permit status, and physical headcount
• Domestic worker law updates — tighter obligations under Federal Law No. 10 of 2017 on hours and dispute resolution
• ILOE enforcement — active auditing of Involuntary Loss of Employment insurance enrolment; gaps trigger administrative penalties
• Remote and flexible work guidance — updated contract clause requirements for remote, part-time, and flexible workers

Employment Contracts: The Fixed-Term Mandate and 6 Work Models

All private-sector contracts must be fixed-term (maximum 3 years, renewable). Open-ended contracts issued before February 2, 2022 should already be converted — unconverted contracts are a penalty risk.

The 6 Recognised Work Arrangements (Ministerial Resolution No. 47 of 2022)

1. Full-time — exclusive arrangement with one employer
2. Part-time — fixed hours across one or more employers
3. Temporary — project-based or time-limited
4. Flexible — variable hours based on operational needs
5. Remote/Telework — work performed outside employer premises
6. Job-sharing — two employees share one full-time role

Probation Period Rules

• Maximum duration: 6 months
• Employer termination notice: 14 days minimum
• Employee resignation notice: 1 month (3 months if moving to another UAE employer)
• No end-of-service gratuity is payable if the employee leaves during probation

Working Hours, Overtime, and the Summer Outdoor Work Ban

• Standard hours: 8 hours/day, 48 hours/week
• Ramadan hours (Muslim employees): 6 hours/day, 36 hours/week
• Federal government: 4.5-day work week

Overtime Rates

• Standard overtime: +25% above regular hourly rate
• Night overtime (9 PM–4 AM) and Friday work: +50%
• Maximum overtime: 2 additional hours per day

Summer Outdoor Work Ban

An outdoor work ban applies daily from 12:30 PM to 3:00 PM, June 15 – September 15. Fines start at AED 5,000 per worker and can escalate to permit suspension.

Leave Entitlements: The Complete 2026 Reference

Annual Leave

• 30 calendar days per year after 1 year of service
• Accrual: 2 days/month in the first year
• Calculated on basic salary plus housing allowance

Sick Leave (90-Day Cycle)

• Days 1–15: Full pay
• Days 16–45: Half pay
• Days 46–90: Unpaid

Maternity Leave

• 45 days full pay + 15 days half pay (60 days total)
• Additional 45 days unpaid for post-birth illness (with medical certificate)
• 2 nursing breaks of 30 minutes/day for up to 18 months post-birth
• Dismissing a pregnant or maternity-leave employee is prohibited

Other Statutory Leave

• Paternity: 5 working days within 6 months of birth
• Study: 10 working days/year (requires 2+ years of service at a UAE-accredited institution)
• Hajj: One-time 30-day unpaid leave
• Compassionate: 5 days for spouse; 3 days for parent, child, sibling, grandparent, or grandchild
• Public holidays: ~14–15 days/year; work on a public holiday attracts 150% pay or a substitute rest day

End-of-Service Gratuity: Formula, DEWS, and Part-Time Rules

The Calculation (Based on Basic Salary Only)

• First 5 years: 21 calendar days' basic salary per year
• Beyond 5 years: 30 calendar days' basic salary per year
• Cap: 2 years' total annual salary

Example: AED 10,000 basic salary, 7 years of service → AED 35,000 (years 1–5) + AED 20,000 (years 6–7) = AED 55,000

Resignation Reduces Gratuity

• Under 1 year: no gratuity
• 1–3 years: one-third
• 3–5 years: two-thirds
• 5+ years or employer-initiated termination: full gratuity

Part-Time and Flexible Worker Gratuity

Gratuity accrues proportionally based on contracted hours relative to full-time equivalent. Employers must document flexible worker schedules accurately — underprovisioning creates a liability risk.

DEWS: The Alternative Model

The DIFC Employee Workplace Savings (DEWS) scheme — mandatory in the DIFC, voluntary on the mainland — replaces the lump-sum liability with monthly employer-funded savings accounts, reducing balance sheet risk and improving employee retention.

Wage Protection System: Penalties and Phase II Changes

WPS Violation Escalation

• 1st violation: Warning + AED 1,000 per affected employee
• 2nd violation within 2 years: AED 2,500 per employee + suspension of new work permit applications
• 3rd violation: Work permit ban + referral to Public Prosecution

What Changed in 2026 (Phase II)

• All employers — regardless of headcount — must use WPS-approved payment channels
• Domestic workers employed through licensed agencies now fall under a parallel WPS framework
• Partial payment (paying some employees late) triggers per-employee violations
• MOHRE-compatible SIF (Salary Information File) submission is mandatory each cycle

Termination: Notice Periods, Grounds, and Arbitrary Dismissal

Notice Periods

• Under 1 year: 30 days
• 1–3 years: 30 days
• 3–5 years: 60 days
• 5+ years: 90 days

During notice, employees receive 1 paid day per week to seek new employment.

Termination Without Notice (For Cause)

Employers may terminate immediately for: physical assault at the workplace, disclosure of confidential information, intoxication during work hours, unexplained absence for 7 consecutive days or 20 non-consecutive days per year, criminal conviction, or repeated policy violations after formal written warning.

Arbitrary Dismissal

Dismissal unrelated to work performance (e.g., dismissing an employee for filing a MOHRE complaint) is classified as arbitrary. Compensation: minimum 3 months' total salary, in addition to any gratuity owed.

Emiratisation 2026: Quotas, Sectors, and Penalty Structure

Who Is Covered

• Companies with 50+ employees in 14 strategic sectors: 2% annual Emiratisation increase required
• Companies with 20–49 employees in designated skilled roles: minimum 1 UAE national hire

The 14 Strategic Sectors

Information and communications, financial services, education, healthcare, retail, hospitality, construction, real estate, food and beverage, transportation, manufacturing, media, legal services, and administrative services.

Penalty for Missing Targets

• AED 8,000/month per unfilled Emiratisation position
• AED 96,000/year per unfilled position if targets are missed annually
• Persistent non-compliance triggers a MOHRE classification downgrade, restricting work permit issuance

Use the NAFIS portal to register open roles and access salary top-up support for Emirati hires.

Free Zone vs. Mainland: Which UAE Employment Law Applies?

Federal Decree-Law No. 33 of 2021 covers all mainland employers and most free zones without their own legislation.

DIFC Employees

Governed by DIFC Law No. 4 of 2005 (as amended). Key differences: DEWS savings scheme is mandatory, disputes go to DIFC Courts (not MOHRE), and no Ramadan hour reduction is mandated at law.

ADGM Employees

Governed by the ADGM Employment Regulations 2019 — different end-of-service and redundancy rules, independent of MOHRE.

Practical Rule

If you employ staff in both mainland and free zone entities: keep separate contracts, HR records, and payroll — and ensure every contract states its governing law explicitly.

MOHRE Labour Inspections: What to Prepare

Inspectors now cross-reference WPS data, permit records, and headcount using AI tools. Keep these always audit-ready:

1. Signed employment contracts uploaded to MOHRE's system
2. WPS salary payment logs — last 24 months
3. Leave balances and history per employee
4. Overtime approval and payment records
5. Valid work permit copies with renewal dates tracked
6. Emiratisation registration and Emirati employee contracts
7. Health insurance coverage documentation
8. ILOE enrolment confirmations for all eligible staff

Flexible and Remote Work: Required Contract Clauses

Under Ministerial Resolution No. 47 of 2022, remote and telework are officially valid. Every remote work contract must specify:

• Work location (home address, co-working space, or named remote site)
• Core availability hours
• Equipment provision — who supplies and maintains hardware
• Data security obligations — VPN, access controls, confidentiality
• Expense reimbursement policy

WPS payment obligations are identical for remote workers. Intra-UAE remote arrangements (working from a different emirate) require no additional permits.

Mandatory Insurance: ILOE, Taa-meen, and Health Coverage

ILOE (Involuntary Loss of Employment Insurance)

Mandatory for all private-sector employees except investors, domestic workers, and temporary contracts under 1 year:

• Up to AED 16,000/month salary: AED 5/month premium
• Above AED 16,000/month: AED 10/month premium
• Benefit: Up to AED 10,000–20,000/month for 3 months on qualifying unemployment

Taa-meen and Health Insurance

All MOHRE work permit holders must be covered under the Taa-meen worker accident insurance (Ministerial Resolution No. 318 of 2022). Health insurance is mandatory for all employees in Abu Dhabi and Dubai (minimum Essential Benefits Plan in Dubai for lower earners).

How Mai HRMS Keeps You MOHRE-Compliant

Mai HRMS is purpose-built for UAE compliance:

• Payroll with WPS-ready SIF file generation — MOHRE-compatible outputs every cycle
• Leave management — tracks all statutory leave types with automated accrual and balance updates
• Compliant digital onboarding — structured workflows with built-in UAE labour law checkpoints
• Gratuity calculator — automatic provisioning for all work arrangement types including part-time
• Time and attendance — audit-ready records with regularization request workflows
• Emiratisation dashboard — real-time headcount vs. target tracking with quarterly threshold alerts
• AI Assistant — instant answers from your live HR data ("What is Ahmed's leave balance?", "When does his permit expire?")

Start your 30-day free trial — no credit card required. Full access to every module from day one.

2026 UAE Employer Compliance Checklist

1. All contracts fixed-term, signed, and uploaded to MOHRE's system
2. WPS payment records on file for the past 24 months
3. All eligible employees enrolled in ILOE
4. Emiratisation headcount reviewed against current quarterly target
5. Leave entitlements correctly calculated and no statutory leave withheld
6. Health insurance active and compliant for your emirate
7. All work permits valid with renewals tracked 60+ days in advance
8. Overtime documented and paid at correct premium rates
9. Remote/flexible work contracts include 2026 required clauses
10. Outdoor work ban protocols documented and briefed before June 15
11. Gratuity provisions correctly calculated per employee, including part-time staff
12. MOHRE permit records match actual active headcount — no ghost workers or misclassified contractors

Frequently Asked Questions

What is MOHRE labour law 2026 and what does it govern?

MOHRE labour law 2026 refers to the UAE employment framework built on Federal Decree-Law No. 33 of 2021 and its Ministerial Resolutions. It governs contracts, working hours, leave, termination, wages, Emiratisation, and workplace safety for private-sector mainland employers.

What specifically changed in UAE labour law in 2026?

Key 2026 changes: WPS Phase II now covers all employers regardless of size, Emiratisation fines are AED 8,000/month per unfilled position, MOHRE has deployed AI-assisted inspections, ILOE enrolment is actively enforced, and updated guidance clarifies remote/flexible work contract requirements.

What are the WPS penalties for late salary payment?

First violation: AED 1,000 per affected employee plus a warning. Second violation within 2 years: AED 2,500 per employee plus new permit suspension. Third violation: full permit ban and Public Prosecution referral.

How is end-of-service gratuity calculated in the UAE?

Based on basic salary only: 21 days per year for the first 5 years, 30 days per year thereafter, capped at 2 years' total salary. Resigning employees receive reduced gratuity — full entitlement only applies after 5+ years of service.

What is the Emiratisation fine in 2026?

AED 8,000 per month per unfilled Emirati position — AED 96,000 per position per year. Persistent non-compliance also results in a MOHRE classification downgrade.

Does UAE federal labour law apply to DIFC and ADGM employees?

No. DIFC employees are governed by DIFC Law No. 4 of 2005 (as amended), with disputes resolved in the DIFC Courts and end-of-service handled through the mandatory DEWS scheme. ADGM employees follow the ADGM Employment Regulations 2019. Neither group falls under MOHRE.

What leave are employees entitled to under UAE law?

30 days' annual leave; 90-day sick leave cycle (15 full pay, 30 half pay, 45 unpaid); 60 days' maternity leave (45 full + 15 half); 5 days' paternity leave; 10 days' study leave per year; one-time 30-day Hajj leave; and 3–5 days' compassionate leave.

Can employers offer remote work contracts under UAE law?

Yes — remote and telework are officially recognised under Ministerial Resolution No. 47 of 2022. Contracts must specify work location, availability hours, equipment, data security, and expense terms. WPS obligations are unchanged for remote employees.

What is the maximum probation period under UAE labour law?

6 months. Employer termination during probation requires 14 days' written notice. Employees resigning must give 1 month's notice (3 months if moving to another UAE employer).

How many annual leave days do UAE employees get?

30 calendar days per year after completing 1 year of service, accruing at 2 days per month in the first year.

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For informational purposes only, reflecting MOHRE guidance and UAE legislation as of June 2026. For advice specific to your business, consult a qualified UAE employment lawyer.

Last updated: June 2026 by the Mai HRMS editorial team.