Expand your business in Dubai - without an entity
New Horizons provides global employment solutions for businesses wanting to hire employees and distribute payroll in the UAE. Through our UAE Professional Employer Organization (PEO) and Employer of Record, we manage your company’s payroll, benefits, and expenses in the UAE, which include Abu Dhabi, Ajman, and Dubai PEO services. Additionally, we oversee HR duties, as well as employment and tax compliance.
New Horizons will act as your employees’ Employer of Record, which means you can begin doing business in the UAE without a local entity. This not only allows your business to go to market faster, but also has the potential to save your business thousands in expansion costs.
As the only UAE PEO with an in-house recruitment team, New Horizons will source, hire, and onboard your UAE workforce. We hire employees in accordance with UAE labor regulations and coordinate all expense claims and benefits payments. Although we act as your employees’ Employer of Record, you still maintain full autonomy and control over all employees.
Our UAE - Dubai PEO simplifies your expansion
New Horizons enables your business to expand its operations into the UAE – without setting up a legal subsidiary.
New Horizons ensures day-to-day guidance to help your business navigate UAE labor laws and regulations. We also provide mandatory monthly payroll requirements, and absorb all local employment liabilities. Partnering with our UAE PEO is the quickest and most cost-effective way to enter the UAE market.
Employment & Labor Laws in UAE
📝 Employment contracts in the UAE
In the UAE, written employment contracts are mandatory for compliant visa sponsorship of an employee. Contracts are also standard for companies hiring employees in the UAE.
Contracts should clearly indicate the employee’s rate of compensation, benefits, job responsibilities, and any protocols around termination. In some instances, default laws will apply, regardless of what is stipulated in an employment contract. However, in other cases, default rules can be avoided by providing clear and specific clauses in a contract. It is crucial that foreign businesses utilize employment contracts that comply with local labor laws.
When you partner with New Horizons’ UAE & Dubai PEO, we ensure that employment contracts comply with all local labor regulations.
⏰ Working hours in the UAE
The standard work week in the UAE runs from Sunday to Thursday, with weekends taking place between Friday and Saturday. Local labor laws stipulate that only Fridays are mandated days off. Many companies across the UAE operate across a 5.5 or 6-day work week.
For employees that need to work on a Friday, they are entitled to another day off, or base pay of normal working hours with no less than a 50% increase on that pay.
Maximum working hours in the UAE are eight hours per day, or 48 hours per week. Although employees in the public sector often work from 7:30am to 2:30pm, standard hours at private organizations can vary.
During Ramadan, working hours must be reduced by two hours each day.
🔎 Employment taxes
Whilst there are no employer taxes in the UAE, employers are advised to contribute 8.3% of an employee’s compensation towards End of Service Benefit or Gratuity.
🏥 Health insurance
Abu Dhabi and Dubai require employer-provided health insurance coverage. Insurance for the employee’s spouse and dependents is also required. Businesses in other Emirates often provide employees with employer-sponsored health insurance even when not required by the employer.
New Horizons UAE, Abu Dhabi, and Dubai PEO services provide health insurance coverage and benefits to employees working in the United Arab Emirates on behalf of our clients.
🏖 Vacation leave
In the UAE, 30 calendar days of vacation is the standard annual leave benefit. The amount of vacation leave is dependent on how long an employee has been with a company. This is outlined below:
- Less than six months: Employees are not entitled to annual vacation leave
- 6-12 months: Employees are entitled to annual vacation leave of no less than two days for each month’s company service
- Over one year: Employees are entitled to 30 day’s annual vacation leave
😷 Sick leave
In the UAE, employees are eligible for up to 90 day’s sick leave per year, once they have worked for a company for at least three months after any probationary period. Vacation leave is paid at the following rates:
- Full wages for the first 15 days of sick leave
- Half the amount of monthly wages for the following 30 days
- No wages for the remaining time period
If the employee’s sickness is due to their misconduct, they are not entitled to sick leave.
👶 Maternity and paternity leave
Female employees who have worked continuously with a company for at least one year are entitled to 45 day’s paid maternity leave. If the employee has not yet accumulated a year of continuous service, she is entitled to the same term of leave at half pay. Employees can choose to extend their maternity leave for up to 10 additional days without pay.
For up to 18 months after having a baby, mothers can take two breaks of up to 30 minutes for nursing.
UAE laws stipulate that fathers receive five day’s paternity leave. This must be taken within six months of the child’s birth.
💰 Severance in the UAE
Employees in the UAE who have worked one or more years of continuous service are entitled to severance pay if terminated. An employee’s severance is equal to the following rate of pay, based on the duration of their employment:
- 21 days for company service between one and five years
- 30 days per year of service for every year after the first five years
If an employee has an indefinite employment contract and chooses to resign, they are entitled to the following amount of severance pay:
- One-third of 21 day’s salary for between one and three year’s service
- Two-thirds of 21 day’s salary for between three and five year’s service
- 21 days for service extending beyond five years
Navigating employee terminations and handling severance packages can be complicated for companies expanding overseas for the first time. New Horizons’ UAE PEO can mitigate risk for foreign companies and provide guidance through this process.
💳 UAE compensation and benefits
UAE compensation laws
There is no set minimum wage in the UAE for expats. However, UAE nationals have designated salary requirements that are determined by their education. For nationals with no high school certificate, they cannot earn less than 3,000 dirhams (AED) each month. For high school graduates, the minimum wage is 4,000 AED per month, whilst employees with a college certificate cannot earn below 5,000 AED in a month.
Employers also need to be mindful of paying employees correctly for any overtime. Employees who work on a Friday – a designated statutory day off – are eligible to receive a pay increase of at least 50%, or another day off.
Guaranteed benefits in the UAE
When conducting a benefit management plan, employers need to be mindful of guaranteed benefits required by law. During the country’s official public holidays, employees are entitled to days off with full pay. Vacation leave is dependent on the length of time an employee has been with a company. However, the industry ‘norm’ is generally 30 day’s vacation per year.
Female employees expecting a child are entitled to 45 day’s paid maternity leave – so long as they have been with their employer for at least one year. For women that have been with their employer less than a year, they are entitled to maternity leave at half pay.
Male employees in the UAE are entitled to five day’s paternity leave. This leave must be taken within six month’s of a child’s birth.
UAE benefit management
Benefit management in the UAE should include both statutory and supplemental benefits. This will assist employers to attract and retain high-level talent. One such benefit that is required by law is pilgrimage leave. All workers are entitled to a one-time pilgrimage leave of 30 days, without pay.
Both Abu Dhabi and Dubai have compulsory health insurance programs that must be provided to all employees, their spouses, and their dependents. Although it is not mandatory in other Emirate states, many UAE employers elect to provide their employees with employer-sponsored health insurance.
Working with New Horizons’ Abu Dhabi and Dubai PEO solutions can allow you to offload employee benefit management to ensure full accuracy and legal compliance.
Benefits and compensation restrictions
It should be acknowledged that the UAE does not have many notable restrictions on benefits and compensation. This includes no established minimum wage for expatriate employees. The UAE Penal Code stipulates that it is a criminal offense for anyone to join or participate in a trade union or labor strike.