The UAE has introduced significant amendments to its labour-law framework through Federal Decree-Law No. 9 of 2024, which amended certain provisions of Federal Decree-Law No. 33 of 2021 on the Regulation of Labour Relations.
The amendments, which came into effect on 31 August 2024, increase penalties for certain labour-law violations and strengthen the role of the Ministry of Human Resources and Emiratisation (MOHRE) in resolving employment disputes.
One of the most significant changes is the increase in certain labour-law fines from a maximum of AED 200,000 to AED 1 million. The amendments therefore reinforce the importance of proper compliance with UAE employment, work-permit and Emiratisation requirements.
Key Changes Under the UAE Labour Law Amendments
| Area | Key Change |
|---|---|
| Maximum fine for specified violations | Increased from AED 200,000 to AED 1,000,000 |
| Minimum fine for specified violations | Increased from AED 50,000 to AED 100,000 |
| Fictitious employment and Emiratisation violations | Fines may be calculated based on the number of workers involved |
| MOHRE dispute-resolution authority | MOHRE may issue binding decisions in qualifying claims of up to AED 50,000 |
| Appeal of MOHRE decisions | Appeals may be brought before the Court of First Instance |
| Labour claim limitation period | Claims are generally subject to a two-year limitation period from termination |
The precise penalty depends on the nature of the violation and the applicable provisions of UAE labour legislation and its implementing regulations.
1. UAE Labour Law Fines Increased to AED 1 Million
One of the most important amendments concerns the financial penalties applicable to certain serious violations.
Under the amended Article 60, specified labour-law offences may attract fines ranging from AED 100,000 to AED 1 million, depending on the nature and circumstances of the violation.
Examples of conduct covered by the amended penalty framework include:
- Employing a worker without obtaining the required work permit;
- Recruiting a worker without providing genuine employment;
- Using a work permit for a purpose other than the purpose for which it was issued;
- Closing an establishment without properly settling employees' outstanding dues; and
- Illegally employing minors.
The substantial increase in potential fines significantly increases the financial exposure of employers that fail to comply with UAE labour regulations.
2. Fictitious Employment and Emiratisation Violations
The amendments also address fictitious employment arrangements, including arrangements intended to artificially satisfy UAE Emiratisation requirements.
Employers should ensure that employees registered for Emiratisation purposes are genuinely employed, perform their stated functions and receive the employment benefits applicable to their roles.
Where a violation involves multiple workers, penalties may be calculated with reference to the number of workers involved. Depending on the circumstances, certain violations may also result in referral for criminal proceedings or other legal consequences.
Employers should therefore regularly review their Emiratisation records, employment contracts, payroll records and actual workforce arrangements.
3. MOHRE's Increased Role in Labour Dispute Resolution
Another important development is the expanded role of MOHRE in resolving certain labour disputes.
For qualifying employment claims of up to AED 50,000, MOHRE may issue a decision that is binding on the parties without requiring the dispute to proceed to court at the first instance.
This mechanism can provide a more efficient route for resolving certain employment disputes, including claims relating to:
- Unpaid wages;
- End-of-service benefits;
- Termination-related payments; and
- Other qualifying employment entitlements.
Where a party wishes to challenge a MOHRE decision, an appeal may be brought before the Court of First Instance, subject to the applicable procedural requirements and deadlines.
4. Two-Year Limitation Period for Labour Claims
The amended framework also provides for a two-year limitation period for labour claims, generally calculated from the date of termination of the employment relationship.
Employees and employers should therefore avoid unnecessary delays when pursuing or responding to employment claims.
Failing to take timely legal action may create procedural or limitation issues that could affect a party's ability to pursue a claim.
In appropriate circumstances, MOHRE may also require an employer to continue paying wages for a limited period while a labour dispute is being considered.
5. What Should UAE Employers Do to Remain Compliant?
Given the increased financial penalties, employers should treat labour-law compliance as an ongoing business responsibility rather than something to address only after receiving a complaint or inspection notice.
Review Employee Work Permits
Employers should verify that each employee has the appropriate work permit and that the permit is being used for its authorised purpose.
Ensure Genuine Employment
Companies should maintain proper records demonstrating that employees are genuinely employed and performing their contractual roles.
Review Emiratisation Compliance
Employers subject to Emiratisation requirements should regularly verify that their Emiratisation records accurately reflect genuine employment relationships.
Settle Employee Entitlements
Businesses undergoing closure, restructuring or liquidation should ensure that employees' contractual and statutory entitlements are properly calculated and settled.
Maintain Proper HR Documentation
Employers should maintain accurate and up-to-date:
- Employment contracts;
- Work permits;
- Payroll and salary records;
- Leave records;
- Attendance records;
- End-of-service calculations;
- Termination documents; and
- Other employment-related records.
Respond Promptly to MOHRE Complaints
If an employee files a complaint with MOHRE, employers should respond promptly and ensure that relevant contracts, payment records, correspondence and other supporting evidence are readily available.
Early legal review can help employers understand their position and prepare an appropriate response.
Why UAE Labour-Law Compliance Matters
The increase in potential fines demonstrates the UAE's continued focus on strengthening labour-market regulation and protecting the integrity of employment relationships.
A labour-law violation can expose a business to more than just financial penalties. Depending on the circumstances, employers may also face disputes, regulatory action, operational disruption and potential criminal consequences.
For this reason, businesses should consider conducting periodic employment-law compliance reviews rather than waiting until a dispute or inspection arises.
Practical Takeaway for Employers
Federal Decree-Law No. 9 of 2024 has significantly increased the potential financial consequences of certain UAE labour-law violations, with specified fines reaching up to AED 1 million.
At the same time, the amendments provide MOHRE with a more direct role in resolving qualifying labour disputes, including certain claims of up to AED 50,000.
Employers in Dubai and across the UAE should therefore regularly review their:
- Work permits;
- Employment contracts;
- Payroll and employee records;
- Emiratisation arrangements;
- Employee entitlements; and
- Labour-law compliance procedures.
With potential penalties reaching AED 1 million, proactive employment-law compliance can be substantially more cost-effective than addressing a serious violation after it occurs.
Need Assistance With UAE Labour Law Compliance?
Concept Advocates advises employers and employees in Dubai on UAE labour-law compliance, employment disputes, work-permit matters, MOHRE proceedings and related court proceedings.
For confidential legal assistance, contact us:
📞 +971 56 889 7000
📞 +971 52 835 2702
✉️ support@conceptadvocates.com
📍 Dubai, UAE
This article is provided for general informational purposes only and does not constitute legal advice. The application of UAE labour legislation depends on the facts and circumstances of each case. Applicable laws, regulations and penalties may be amended from time to time. Professional legal advice should be obtained for specific matters.
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