Taxes and accounting
Salaries and Labor Guarantees in the UAE
What do you need to know about labour guarantees in the UAE: minimum wages, payrolls, overtime premiums, housing allowance and accommodation.
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Overview
At present, the UAE has no statutory minimum wage. However, a minimum wage may be introduced in the future. Article 27 of the new Labor Law states: “The Cabinet may, upon the proposal of the Minister and in coordination with the relevant authorities, issue a resolution determining the minimum wage for workers or for any category thereof.”
Salaries are usually paid in UAE dirhams, but they may be paid in another currency if this is agreed upon by both parties in the employment contract (Article 22 of the Labor Law).
Salaries in Mainland, JAFZA, and DMCC Free Zones
Salaries must be paid in accordance with Ministerial Resolution No. 43 of 2022 on the Wage Protection System (WPS).
All establishments registered in these jurisdictions are required to pay employees on time through the WPS system approved by the Ministry, or another designated system.
This means salaries must be paid centrally via WPS.
Special Labor Guarantees and Employee Rights
Article 13 of the Labor Law sets out key employer obligations:
- Provide employees with suitable accommodation or pay a housing allowance, either separately or as part of their salary (this is usually reflected in the employment contract).
- Cover the cost of repatriating the employee to their home country (or another agreed destination), except where: the employee joins another employer, or the contract is terminated for reasons attributable to the employee.
The Labor Law also regulates working hours (Article 17). The maximum normal working hours are:
- 8 hours per day
- 48 hours per week
Employees cannot work more than 5 consecutive hours without a break (or breaks) totaling at least one hour. Breaks are not included in working hours (Article 18).
“If the nature of work requires an employee to work beyond the normal working hours, the excess is considered overtime, for which the employee is entitled to salary plus an allowance of at least 25% of basic pay. If overtime falls between 10 PM and 4 AM, the employee is entitled to salary plus an allowance of at least 50%.” Aleksei Romanov Associate
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