The UAE labour law 2025 reflects the government’s continued efforts to create a balanced, fair, and competitive work environment. Whether you’re running a construction company, retail chain, cleaning business, or logistics operation, you must be up to date with the new regulations.
Failing to comply with UAE labour law 2025 may lead to fines, visa rejections, or even blacklisting. This article by Mahad HRC breaks down the most important legal changes every employer should know.
UAE Labour Law 2025—What Employers Must Know This Year
Key Updates in UAE Labour Law 2025
Here’s what’s new and noteworthy:
1. All Contracts Must Be Limited-Term
As per UAE labour law 2025, all employment contracts must now be limited to a maximum of 3 years (renewable). Indefinite-term contracts are no longer permitted.
Why this matters:
Ensures clarity for both employer and employee
Offers flexibility in workforce planning
Prevents long-term disputes
Employers must update old contracts before Q3 2025 to avoid penalties.
2. Probation Period Rules Are Now Stricter
The law now states:
Probation can’t exceed 6 months
A 14-day notice is required if the employee is terminated during probation
If a worker resigns to join another company in the UAE, they must give 1- month’s notice
If resigning to leave the UAE, they must give 14 days’ notice
3. New End-of-Service Benefits System Introduced
Employers can now choose between
Traditional gratuity system
Or a savings scheme approved by the Ministry
UAE labour law 2025 encourages transparent payout calculations and employee savings. This helps attract high-quality talent and builds employer credibility.
4. Leaves and Holidays Clarified
Employers must now provide:
Annual Leave: 30 calendar days after 1 year of service
Sick Leave: 90 days (with salary rules)
Parental Leave: 5 working days for both parents
Study Leave: 10 days/year (for 2+ years employees enrolled in UAE institutions)
Compassionate Leave: 3–5 days depending on relation
All leave policies must be written in employee contracts or HR handbooks.
5. Anti-Discrimination & Equal Pay Provisions
UAE labour law 2025 now includes stronger language against:
Discrimination based on gender, race, religion, or nationality
Unequal pay for men and women doing the same job
Harassment or threats at the workplace
Employers are encouraged to have zero-tolerance policies in place.
Penalties for Non-Compliance in 2025
Failing to adhere to UAE labour law 2025 can result in:
| Violation | Fine (AED) |
|---|---|
| Not converting old contracts | 5,000 per employee |
| Late salary payments (WPS) | 1,000–50,000 |
| Illegal termination | Up to 20,000 |
| Not registering ILOE | 400 per worker |
| Absconding misuse | 10,000 per case |
Mahad HRC’s Support for Employers
At Mahad HRC, we offer:
Full contract audits for legal compliance
Conversion of old unlimited contracts
PRO services for MOHRE & legal document updates
In-house training for HR teams on UAE labor law 2025
Assistance with leave management, payroll setup, and termination handling
We work with small and large businesses to ensure zero errors and smooth operations.
Documents to Keep Updated Under UAE Labour Law 2025
Employers must regularly update and retain:
Valid offer letters and limited contracts
Job descriptions and responsibilities
WPS salary records
Leave balances and approvals
Termination notices and final settlements
Employee passport, visa, and Emirates ID copies
These documents may be requested during MOHRE inspections or labour dispute hearings.
Final Word
UAE labour law 2025 isn’t just a legal update; it’s a compliance roadmap for responsible employers. Stay ahead of the curve. Ensure your contracts, policies, and worker records are aligned with the latest rules. And if you need help, Mahad HRC is ready to assist, guide, and protect your business.