Moving to the UAE for work in 2025? Before signing any offer, understand how employment contracts work. The UAE has specific rules that protect both employers and expats. This blog explains the essentials you need to know.
1. Two Main Types of Employment Contracts
As of 2025, the UAE Labor Law defines two types:
- Limited Term Contract:
- Fixed end date.
- Common in free zones and private companies.
- Early termination may result in penalties.
- Unlimited Term Contract:
- Now phased out under the new labor reforms (Federal Decree-Law No. 33 of 2021).
- All contracts are shifting to limited formats, renewable if needed.
Why it matters: You need to understand the term length, renewal terms, and penalties.
2. Key Clauses to Watch For
Your contract should include:
- Job title and description
- Salary (basic and total)
- Working hours
- Probation period (max 6 months)
- Leave entitlements
- Termination clauses
- End-of-service benefits
Check for clarity in each clause. Vague terms often lead to disputes.
3. Probation Period Rules in 2025
- Can’t exceed 6 months.
- Employer must give 14 days’ notice to terminate during probation.
- Employee must give 1 month’s notice if resigning to join another UAE company.
- 14 days’ notice if leaving the UAE.
4. Working Hours and Overtime
- Normal hours: 8 hours/day or 48 hours/week
- During Ramadan: 6 hours/day
- Overtime pay: 125% to 150% of base hourly rate depending on time worked
5. Annual Leave Entitlements
- After 1 year: 30 calendar days per year
- Between 6-12 months: 2 days per month
- Unused leave can be carried over or compensated in cash upon exit
6. Contract Termination: What to Expect
- Notice period: 30 to 90 days (as per contract)
- Termination by employer without notice: Only in cases like gross misconduct
- Resignation: Must give full notice, or risk salary deduction
Severance pay (end-of-service benefits) applies if you complete at least one year.
7. Non-Compete Clauses in UAE Contracts
These are enforceable if:
- Clearly defined (time, place, job scope)
- Reasonable in duration (typically up to 2 years)
- Justified to protect legitimate business interests
Seek legal review if you’re unsure.
8. Digital Contracts & MOHRE Verification
All contracts must be registered with the Ministry of Human Resources and Emiratisation (MOHRE). Digital signing is standard. You can verify your contract using the MOHRE app or website.
Conclusion
In 2025, UAE labor laws offer clear protection for expats—but only if you understand your employment contract. Always read every clause, ask questions, and ensure your contract is officially filed.
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