UAE Amends Labor Law, Announces Up To AED1 Million Fine For Violations

The UAE government announced Monday that employers could face fines of up to AED 1 million as it issued a Federal Decree-Law amending specific provisions of the Federal Decree-Law Regarding the Regulation of the Employment Relationship, known as the "UAE Labor Law".

Under new rules, fines between AED 100,000 and AED 1 million will be imposed on employers for specific violations, including hiring workers without a proper work permit or bringing them in without offering a job and closing a business without settling workers' rights.

Additionally, employers' involvement in fraudulent labor practices such as fake job offers or false Emiratisation, employing minors in violation of the law, and trying to bypass labor laws or regulations, including through fake employment will also come under violation, WAM mentioned.

Under the new rules, fines will increase depending on how many workers are falsely employed. The Ministry of Human Resources and Emiratisation can now offer a settlement if the employer pays 50% of the minimum fine and returns any financial incentives given to fake employees.

According to the decree, criminal charges for fake employment, including false Emiratisation, can only be brought if requested by the Minister of Human Resources and Emiratisation or their authorized representative, Khaleej Times reported.

The decree states that disputes between employers and employees should be taken to the Court of First Instance, not the Court of Appeal, if there is a disagreement with the Ministry of Human Resources and Emiratisation's decision.

This rule applies to all cases except those already adjusted or awaiting judgment. Starting from the implementation date, the Court of Appeal must send all employment-related disputes to the Court of First Instance.

Under the new rules, the court will not handle any claims filed more than two years after the end of the employment relationship.

This decree is part of the UAE's efforts to improve its legal system and aims to make the labor market more efficient and competitive, regulate employment relationships, and clearly define the rights and responsibilities of everyone involved, ensuring they are protected by law.

Earlier this year, the Ministry of Human Resources and Emiratization (MoHRE) started the implementation of the cabinet decision on more than over 12,000 companies with 20-49 employees to meet Emiratisation targets.