UAE labour Law 2025 – Leave, Salary & Contract Reforms

In 2025, the United Arab Emirates (UAE) introduced several critical updates under the UAE Labour Law 2025, aiming to align with global employment standards and promote workplace fairness. Whether you’re a job seeker, expat, or employer, understanding these changes is essential to staying compliant and protected.

Employment Contracts: Shift to Fixed-Term Only

From January 1 2025, all employment contracts in the private sector must be fixed-term, with a maximum limit of 3 years. Unlimited contracts have been fully phased out.

If an employee continues to work beyond the contract expiry without formal renewal, the same contract auto-renews under the same conditions.

Working Hours & Overtime Policy:

• Normal working hours: 8 hours/day or 48 hours/week.
• Overtime rules:
  • Regular overtime: 125% pay
  • Overtime between 10 PM–4 AM: 150% pay
  • Public holidays: 150% pay

This ensures fair compensation for extended hours, especially in service or shift-based roles.

UAE Labour Law 2025 – Revised Leave Benefits

The UAE Labour Law 2025 introduces notable improvements to employee leave policies. These changes actively support work-life balance, employee well-being, and inclusivity in the workplace. Each leave category has been clearly defined to ensure transparency and fairness.

Annual Leave

Employees now receive 30 calendar days of paid annual leave after completing one year of continuous service.
Moreover, if an employee has worked for less than a year, the employer must provide leave on a pro-rata basis.
This approach guarantees that every worker enjoys adequate rest, even during the first year of employment.

Sick Leave

The law entitles employees to 90 days of sick leave per year, distributed across three stages:

• For the first 15 days, employers must pay the employee in full.
• Over the next 30 days, the employer pays 50% of the salary.
• During the final 45 days, the leave becomes unpaid.

Consequently, employees can take time to recover without the immediate pressure of returning to work due to financial stress.

Maternity Leave

The government has extended maternity benefits. Female employees now receive 60 days of maternity leave, broken down into:

• 45 days with full pay, followed by
• 15 days with half pay

As a result, working mothers gain more time for recovery and childcare, while maintaining partial income during the full leave period.

Paternity Leave

New fathers now receive 5 working days of paid paternity leave.
They must utilize this leave within six months of the child’s birth.
Furthermore, this benefit promotes family involvement and acknowledges the evolving role of fathers in early childcare.

Study Leave

In support of continued learning, employees enrolled in academic programs can take 10 days of paid study leave per year.
To qualify, they must complete at least two years with the current employer.
This provision encourages personal development and helps companies cultivate a more skilled workforce.

MOHRE Dispute Handling Under UAE Labour Law 2025

• Salary Protection: Employers must continue salary payments for up to 2 months during legal disputes.
• Probation Period Dismissals: A minimum 14-day written notice is mandatory.
• Small Dispute Resolution: MOHRE can make binding decisions if claim value ≤ AED 50,000.

For official details, visit MOHRE.gov.ae – UAE Labour Law 2025

Employee Rights & Protections

The law strongly enforces:

• No discrimination based on gender, race, religion, disability, or nationality.
• No harassment or abuse: Employers must prevent psychological or physical abuse, bullying, or threats.

These protections reflect UAE’s push toward ethical and inclusive work environments.

Gratuity Rules in UAE Labour Law 2025

Your gratuity calculation (for full-time employees) is based on the following:

• 21 days’ salary/year for the first 5 years
• 30 days’ salary/year after 5 years

The gratuity amount is based on the employee’s basic salary only, not total compensation.

👉 Use the MOHRE Gratuity Calculator to determine your payout.

Summary

The UAE Labour Law 2025 introduces several impactful reforms that reshape the country’s employment framework. To begin with, it significantly improves employee contract transparency, requiring clear, fixed-term agreements that protect both parties from ambiguity. In addition, the law enhances leave structures by expanding entitlements such as maternity, paternity, sick, and study leave. These adjustments promote better work-life balance and reflect a modern understanding of employee needs. Furthermore, the legislation strengthens legal protections by giving the Ministry of Human Resources and Emiratisation (MOHRE) greater authority to resolve labour disputes efficiently, especially for claims under AED 50,000. As a result, employees now have quicker access to justice and fairer conflict resolution mechanisms.

Moreover, the 2025 updates place a strong emphasis on anti-discrimination and gender equality, explicitly prohibiting bias based on gender, nationality, religion, or disability. Employers must now adopt inclusive policies and ensure respectful workplace environments free from harassment or abuse. These progressive measures not only safeguard workers but also support organizational growth by fostering trust and integrity. Ultimately, the law positions the UAE as a global employment hub—one that prioritizes legal clarity, ethical practices, and human rights. With these updates, the UAE continues to attract top talent and set a regional benchmark for labour reforms.

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