New UAE Employment Contract Changes & Deadlines 2023

Employers must switch workers to limited-term contracts by February 1.

You’ll want to pay attention to this important update on employment law in the United Arab Emirates. Two key deadlines are approaching, with the first just over a week away.

According to the latest labor law, all employers must transfer contracts by Wednesday, February 1st, unless they are in the Abu Dhabi Global Market or Dubai International Financial Free Zones. Families employing domestic workers are also exempt from the changes.

This may seem like just another legal requirement, but it’s actually part of a larger effort to modernize the private sector work landscape in the UAE. The new law will make it easier for employers and employees to agree on part-time work, job sharing, and project-based tasks.

In October, a federal decree removed a previous three-year cap on contracts, giving employers and employees more flexibility to determine the length of a contract. However, this also means that companies who updated their contracts last February may need to do so again.

It’s important to note that businesses that fail to update their employment contracts by the deadline may face fines or penalties, although the specifics of these penalties have not yet been announced.

To avoid any potential issues, it’s crucial that employers review and update their employment contracts by February 1st. This may seem like a small task, but it’s a necessary step to ensure compliance with the latest labor laws in the UAE. Don’t wait until the last minute to take action and make sure your business stays in compliance with the new rules.

Unemployment insurance

The second employment law update states that all employees working for a company subject to the Ministry of Human Resources and Employment must register for unemployment insurance.

This insurance scheme, which came into effect on January 1st, is designed to provide financial assistance to individuals who lose their jobs. The cost of the insurance is relatively low, ranging from only Dh5 to Dh10 per month. In the event of job loss, individuals could receive thousands of dirhams per month for three months to help tide them over during the transition.

This insurance is not only a safety net for the individual but also a way for the government to help protect its citizens from the effects of job loss, which has been a problem during the pandemic.

The deadline to register is fast approaching, so it’s important to take action now to ensure you’re covered. If you’re unsure about whether or not your company is subject to the Ministry of Human Resources and Emiratization, or if you have any questions about the registration process, be sure to reach out to your HR department for more information.

Don’t wait until the last minute to sign up for unemployment insurance; protect yourself and your family from the effects of job loss by registering today.

We urge you to keep these updates in mind and act swiftly in the hopes that they don’t go unnoticed.