UAE HR Guide
UAE HR Compliance Guide: WPS, Emiratisation & Labour Law
Everything HR teams need to know about payroll compliance, nationalisation quotas, and labour regulations in the United Arab Emirates.
AED 72K
Fine per unfilled Emirati position/year
10%
2026 Emiratisation target
45+
Free zones with different rules
2022
Major labour law reform
1. UAE Wage Protection System (WPS)
The UAE's Wage Protection System is administered by the Ministry of Human Resources and Emiratisation (MOHRE) for mainland companies. All private-sector employers must pay salaries through the WPS, which electronically records payments and ensures workers receive wages on time.
How UAE WPS Works
- Mandatory for all private-sector employers registered with MOHRE
- Salaries must be paid within 10 days of the due date (typically month-end)
- Payments processed through authorised banks, exchange houses, or financial institutions
- MOHRE monitors payments in real time — delays trigger automatic alerts and potential penalties
- Non-compliant companies face work permit suspension and inability to hire new employees
WPS File Requirements
| Field | Description |
|---|
| Employee ID | Emirates ID number or passport number |
| Bank details | Employee IBAN or exchange house account |
| Basic salary | As per employment contract (in AED) |
| Allowances | Housing, transport, and other fixed allowances |
| Deductions | Absences, loans, or other authorised deductions |
| Net salary | Final amount transferred to employee |
Free zone difference: Companies registered in free zones (JAFZA, DAFZA, DMCC, etc.) may have different WPS requirements. DIFC and ADGM have their own employment frameworks entirely. Always check with your specific free zone authority.
2. Emiratisation: UAE's Nationalisation Programme
Emiratisation requires private-sector companies with 50+ employees to increase their Emirati workforce by 2% per year, reaching 10% by 2026. This is managed through the Nafis platform.
Key Emiratisation Rules (2024-2026)
- Scope: All private-sector companies with 50+ skilled workers
- Target: 2% annual increase in Emirati headcount (cumulative)
- 2026 target: 10% of skilled workforce must be Emirati
- Fine for non-compliance: AED 72,000 per unfilled Emirati position per year (AED 6,000/month)
- Minimum salary for counted Emiratis: AED 4,000/month
- "Fake Emiratisation" penalties: AED 100,000+ per instance for hiring Emiratis in name only
Nafis Platform
Nafis is the federal government programme that manages Emiratisation. It provides:
- Salary top-up support for Emirati employees in the private sector
- Child allowance for Emirati private-sector workers
- Unemployment insurance (Involuntary Loss of Employment scheme)
- Training and upskilling programmes
- Job matching between Emiratis and private-sector companies
Enforcement is real: The UAE government has significantly increased Emiratisation enforcement since 2022. Companies found to be circumventing the rules (e.g., hiring Emiratis who don't actually work) face fines starting at AED 100,000 and potential business licence revocation.
3. GPSSA: UAE Social Security
The General Pension and Social Security Authority (GPSSA) administers social security for UAE nationals only.
| Contribution | Rate | Basis |
|---|
| Employer contribution | 12.5% | Pensionable salary (basic + allowances) |
| Employee contribution | 5% | Pensionable salary |
| Government contribution | 2.5% | Pensionable salary |
| Total | 20% | |
Non-UAE nationals: Expatriate employees are not covered by GPSSA. Instead, they receive end-of-service gratuity as per UAE Labour Law.
4. End-of-Service Gratuity
Under the UAE's reformed Labour Law (Federal Decree-Law No. 33 of 2021, effective February 2022):
| Tenure | Gratuity Rate |
|---|
| First 5 years | 21 days' basic salary per year |
| After 5 years | 30 days' basic salary per year |
- Maximum: Total gratuity cannot exceed 2 years' salary
- Minimum tenure: 1 year of continuous service
- Applies to: All employees regardless of nationality
- No reduction for resignation under the new law (previously, resignation reduced gratuity)
- Calculation basis: Last basic salary (excluding allowances, bonuses, overtime)
5. UAE Labour Law: Key Provisions
Working Hours
- Maximum 8 hours/day or 48 hours/week (normal)
- Reduced to 6 hours/day during Ramadan
- Overtime: 125% for regular overtime, 150% for night/weekend overtime
Leave Entitlements
- Annual leave: 30 calendar days after 1 year (2 days/month during probation)
- Sick leave: 90 days per year (15 full pay, 30 half pay, 45 unpaid)
- Maternity leave: 60 days (45 full pay + 15 half pay) + 45 days unpaid
- Paternity leave: 5 working days (within 6 months of birth)
- Compassionate leave: 5 days (spouse death), 3 days (parent/child/sibling death)
Employment Contracts
Since February 2022, all UAE employment contracts must be fixed-term (maximum 3 years, renewable). Unlimited contracts were abolished. Contracts must be in Arabic (bilingual versions are permitted).
6. Mainland vs Free Zone Employment
| Aspect | Mainland (MOHRE) | Free Zone |
|---|
| Regulator | MOHRE | Free zone authority |
| WPS | Mandatory | Varies by free zone |
| Emiratisation | Mandatory (50+ employees) | Generally exempt |
| Labour law | Federal Labour Law | Follows federal law (except DIFC/ADGM) |
| Visa sponsorship | Through MOHRE | Through free zone authority |
| Business scope | Can operate across UAE | Restricted to free zone + export |
DIFC and ADGM are financial free zones with their own independent employment laws based on common law — completely separate from UAE Federal Labour Law. Companies in these zones follow DIFC Employment Law or ADGM Employment Regulations respectively.
Comparing UAE and Kuwait HR Compliance
| Aspect | Kuwait | UAE |
|---|
| WPS administrator | Central Bank of Kuwait | MOHRE |
| Nationalisation | Kuwaitisation (PAM) | Emiratisation (Nafis) |
| Social security | PIFSS (nationals only) | GPSSA (nationals only) |
| EOS formula | 15 days/year (first 5), 1 month/year (after) | 21 days/year (first 5), 30 days/year (after) |
| EOS cap | 1.5 years' salary | 2 years' salary |
| Free zones | Limited | 45+ with varying rules |
| Contract type | Fixed or unlimited | Fixed-term only (since 2022) |
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