United Arab Emirates (UAE)
COVID-19 Status Update: Globalization Partners HR specialists in the UAE report that the government has put restrictions in place to slow the spread of COVID-19, borders are closed to non-UAE residents, and many employees are working remotely/from home. Additionally, all government offices are closed. Globalization Partners continues to advise our clients on how to preserve employees while keeping business intact, and how to empower employees to work from home and stay productive. We are also keeping all of clients and their employees on our platform up to date on any restrictions that affect them—answering questions about how the recent UAE entry suspension will affect people outside of the country, and providing advice on the visa processes for both employees and their families now that Immigration is closed. Despite all this, clients continue to request our solution for their global expansion needs, but we have noticed, anecdotally, that companies are slowing down their hiring processes.
Globalization Partners can help its clients access talent in the UAE through our human resources and other related consulting services in the UAE. If your company is interested in learning more about the UAE market and seeking a way to access local talent without first establishing a branch office or subsidiary in the UAE, our Global Expansion Platform™ is your solution. Our UAE employees are hired in accordance with local labor laws and can be ready in days instead of the months it typically takes. The individual is providing services to your company to fulfill your in-country service needs.
Our Global Expansion Platform™ and local services enable clients to receive the benefits of our local employees in the UAE while the responsibilities of local HR services, tax, and compliance management matters are ours. As a Global Employment expert, we manage employment contract best practices, statutory and market norm benefits, and employee expenses, as well as severance and termination, if required. We also keep you apprised of changes to local employment laws in the UAE.
You’ll have peace of mind knowing you have a team of dedicated employment experts assisting with your every local need. Globalization Partners allows you to harness the talent of the brightest people in the UAE, quickly and painlessly.
Information about Hiring and Obtaining Visas in the UAE
The United Arab Emirates comprises seven Emirates. Most U.S. technology companies hiring sales employees in the UAE focus on the emirates of Abu Dhabi or Dubai. There are also approximately 45 free trade zones in the UAE, more than 30 of which are located in Dubai, each managed by its own free zone authority. Traditionally, companies in the UAE would establish a branch office or subsidiary in Abu Dhabi, Dubai or in one of the free zones, which would enable the company to sponsor or access work permits and thus hire employees. By using our services, you can have access to talent in the UAE without setting up branch offices or subsidiaries.
A business license is required for any business operating in the UAE. Employees must be sponsored under the correct visa in the UAE, either by their employer if in the mainland, or by the respective free trade zone authority if working for a company in the free zone. A company must have the appropriate business license(s) in order to obtain a visa for its employees. If an employee is found to be living and working in the UAE without a visa, or if a company sponsoring an employee’s visa is not properly licensed, the employee may be asked to leave the country and both the employee and the company may be blacklisted from doing business in the UAE.
We handle the processing of all visa applications for the expat employees working for Globalization Partners.
The UAE Labour Law regulates employment on the mainland of the UAE. If employees are employed in a free zone, their employment is regulated by the employment law adopted by the free zone authority where the employee is employed, which may contain differences from the UAE Labour Law. Each free zone authority has its own employment law and employees are subject to the rules and regulations of their respective free zone authority.
If you are considering setting up and hiring in the UAE, when negotiating terms of an employment contract, it may be useful to keep the following in mind:
UAE Employment Contract
A written contract is required to submit an application for visa sponsorship. It is best practice for companies to put in place a strong, written contract in both Arabic and English which spells out the terms of the employee’s compensation, benefits, and termination requirements. Any employment contract in the UAE should always state the salary and any compensation amounts in United Arab Emirates Dirham (AED) rather than a foreign currency.
All of our local employees are provided with robust locally compliant employment contracts that include protection of intellectual property of our clients. You get access to great talent in the UAE, with no need to enter into your own employment contracts.
Working Hours in the UAE
In the UAE, the standard working week is considered Sunday through Thursday – the weekend is Friday and Saturday. However, according to local labor laws, only Friday is a mandated day off and many private companies operate with a 5 ½ or 6-day work week. If circumstances require that an employee works on Friday, he or she is entitled to another day off or to be paid his basic pay for normal working hours plus an increase of not less than 50% of that pay.
The maximum working hours in the UAE are 8 hours a day, or 48 hours in a week. While public employees often work from 7:30 am to 2:30 pm, the normal hours at private companies can vary. During Ramadan, local laws state that working hours must be reduced by 2 hours a day.
Vacation Leave in the UAE
Thirty calendar days of vacation is a market norm benefit in the UAE. Vacation leave is often based on length of service:
Less than 6 months: The employee is not entitled to annual vacation
6-12 months: The employee is entitled to an annual vacation of not less than two days for each month
Over 1 year: The employee is entitled to 30 days of vacation
Vacation time that is not used may be carried forward and accrued or paid out in lieu.
Sick Leave in the UAE
After three months of continuous service following the probation period, an employee is entitled to up to 90 days of sick leave per year, paid as follows:
- Full wage for the first 15 days.
- Half wage for the next 30 days.
- The remaining period would be without wage.
However, if the employee’s illness is directly caused by his misconduct, s/he is not entitled to any wage during the sick leave.
Maternity/Paternity Leave in the UAE
Working women with a year of continuous service are entitled to 45 days maternity leave with full pay. (This includes the period before and after the delivery). The maternity leave is granted with half pay if the woman has not yet completed one year of service. She may then extend her maternity leave for a maximum period of 10 days without pay – this can be continuous or interrupted if caused by an illness (in this case a certified doctor’s note is required). Finally, for up to 18 months following her delivery, female employees are entitled to two daily intervals of up to 30 minutes for the purpose of nursing.
While there is no mandated paternity leave under the UAE Labour Law, private companies are encouraged to offer 3 days or more.
Gratuity Pay, End of Service Benefits, and Severance in the UAE
An employee who completes one year or more in continuous service is entitled to a severance (sometimes referred to as a ‘gratuity’) at the end of their service. If an employee is terminated, he or she would be entitled to gratuity pay as follows:
- 21 days for services beyond 1 year but less than 5 years
- 30 days per year of service will be awarded for every year of service following the first 5 years.
If an employee under an indefinite employment contract resigns, he or she is entitled to an end of service gratuity as follows:
- 1/3 of 21 days basic salary for between 1 and 3 years of service
- 2/3 of 21 days basic salary for between 3 and 5 years of service
- 21 days for service beyond 5 years
Employment Taxes in the UAE
There are no employer taxes in the UAE, however, we recommend accruing 8.3% of the employee’s compensation as for the End of Service Benefit or Gratuity.
Health Insurance Benefits in the UAE
For expats, insurance coverage for employees and their dependents is related to their salary, designation, etc. There are currently two Emirates which mandate employer-provided health insurance coverage: Abu Dhabi and Dubai. Health insurance must be provided to the employee, as well as the employee’s spouse and dependents. While not mandatory in other Emirates, it is common for employers in the UAE to provide employees with employer-sponsored health insurance.
Globalization Partners provides private health insurance to our UAE employees.
Additional Benefits in the UAE
The Hajj is an annual Islamic pilgrimage to Mecca, Saudi Arabia that Muslims are expected to complete at least once in their lifetime. Under UAE Labour Law, employees may be granted a one-time pilgrimage leave of up to 30 days without pay.
Public Holidays in the UAE
Private sector employees are entitled to full pay on official holidays. The UAE Cabinet announces the official holidays and for 2019 and 2020 these are as follows :
- Gregorian New Year
- Eid Al-fitr (4 days)
- Arafah day and Eid Al Adha (Feast of Sacrifice) (4 days)
- Hijri New Year
- Commemoration Day
- National Day (2 days)
Islamic holidays are determined in accordance to moon sighting.
Why Globalization Partners
Establishing a branch office or subsidiary in the UAE to engage a small team can be time-consuming, expensive and complex. It may also be unnecessary. Globalization Partners can give you quick and painless access to talent in the UAE.
If you would like to discuss how Globalization Partners can support your business in the UAE, please contact us.