Key Considerations When Hiring in Dubai:

• Nature of the Job: Whether the role is temporary, project-based, or permanent, as this will influence the type of employment contract to be used.
• Duration of Employment: Assess whether the position is intended for a fixed term or an indefinite period to decide between limited-term and unlimited-term contracts.
• Company’s Legal Capacity: Ensure that your company is authorized to employ individuals in Dubai and complies with all local labor laws and regulations.

An EOR Dubai service like Globaine PEO provider can assist with legal compliance and help avoid issues with local authorities.

What Types of Employment Contracts Are Permissible in Dubai?

Dubai labor law recognizes several types of employment contracts, each suited to different employment scenarios:

• Limited-Term Contracts: Also known as fixed-term contracts, these have a specified duration, typically not exceeding two years.
• Unlimited-Term Contracts: These contracts do not have a defined end date and continue until either party decides to terminate, subject to agreed notice periods. They are commonly used for permanent positions.
• Part-Time Contracts: Allow employees to work for one or more employers for a specific number of hours or days, providing flexibility for both parties.
• Temporary Contracts: Designed for work that is project-based or for a specific assignment, ending upon the completion of the task.

Compliance with Dubai Labor Law:

It is crucial for companies operating in Dubai to ensure that their employment contracts comply with Dubai Labor Law. This includes adhering to regulations regarding contract duration, probation periods, termination procedures, employee benefits, and working conditions.

When Can an Employee Be Hired Directly in Dubai?

According to Federal Decree-Law No. (33) of 2021, the conditions for direct hiring of employees in Dubai are as follows:

Legal Entity Requirement:

A company must have a legal entity registered in Dubai, such as a mainland company, free zone company, or offshore entity. These companies are legally allowed to hire and sponsor employees within Dubai. Without a registered legal presence, a company cannot directly employ staff as they cannot provide work permits or residence visas.

Work Permit and Residency Visa:

All foreign employees must have a valid work permit and residency visa issued by the Dubai Ministry of Human Resources and Emiratisation (MOHRE) or relevant free zone authority. This process requires the employer to handle visa sponsorship, ensuring the employee is legally authorized to live and work in Dubai.

Employer’s Obligations:

The employer is responsible for ensuring the employee’s health insurance, visa expenses, work permits, and other associated employment costs. Employers are also required to provide fair wages, timely payment, and working conditions that comply with the labor law.

Employment Through Employer of Record (EOR):

If a foreign company does not have a registered entity in Dubai, they may use an Employer of Record (EOR Dubai). An EOR acts as the official employer, handling the legal and administrative aspects of employment (e.g., payroll, benefits, visa sponsorship) while the employee works for the foreign company. The EOR is responsible for ensuring compliance with Dubai labor law on behalf of the foreign company.

What Are the Different Contract Types in Dubai?

The Federal Decree-Law No. (33) of 2021 outlines several types of employment contracts in Dubai, each serving different employment needs. These contracts are essential for companies utilizing Employer of Record (EOR Dubai) services to understand how to classify their workforce.

Limited-Term Contracts (Fixed-Term Contracts):

• Definition: These contracts have a defined start and end date, typically lasting for a maximum of 3 years (can be renewed).
• Usage: Suitable for project-based roles or assignments with a specific completion date.
• Probation: Maximum of 6 months probation, in line with Article 9 of the law.
• Notice and Termination: Termination requires notice and adherence to contract terms.
• Renewal: Limited-term contracts can be renewed, but if renewed multiple times, they may convert to an unlimited-term contract.
• Article Reference: Articles 8, 42, and 43 of Federal Decree-Law No. (33) of 2021.

Unlimited-Term Contracts (Permanent Contracts):

• Definition: These contracts have no specified end date and remain in effect until terminated by either party.
• Usage: Commonly used for full-time, permanent positions.
• Notice and Termination: Termination requires a notice period, typically 30 to 90 days depending on the agreement.
• Update: The 2021 amendment aims to standardize these contracts under a unified framework.

Part-Time Contracts:

• Definition: For roles where employees work fewer hours than a standard full-time employee.
• Hours: Limited to 4 hours per day and 24 hours per week.
• Usage: Typically used for roles like consultants, freelancers, or specific project assignments.
• Payment: Payment must be made every 15 days, and no probation period is allowed for part-time contracts.
• Article Reference: Article 7 of Federal Decree Law.

Temporary Contracts:

• Definition: These contracts are tied to a specific task or project. The employment relationship ends automatically once the task is completed.
• Usage: Common in industries such as construction, IT projects, or seasonal jobs.
• Termination: The contract ends upon task completion. If the task is delayed or incomplete, compensation for the employee must be provided.
• Article Reference: Article 7 of Federal Decree-Law No. (33) of 2021.

Remote Work Contracts:

• Definition: Allow employees to perform their tasks outside the employer’s physical office space.
• Usage: Common for remote work arrangements.
• Considerations: Companies using EOR Dubai can hire remote employees without establishing a physical entity, as the EOR will provide visa sponsorship and manage remote work regulations.
• Article Reference: Article 7 of Federal Decree-Law No. (33) of 2021.

How Globaine PEO Can Help

Globaine PEO provides comprehensive Employer of Record (EOR) services in Dubai, allowing foreign companies to hire employees legally without establishing a local entity.

• Compliance with Dubai Labor Law: Ensure all employment contracts and HR policies comply with Dubai labor laws.
• Payroll Management: Handle payroll, tax deductions, and employee benefit distributions.
• Employee Onboarding: Seamlessly onboard employees with visa and work permit processing.

Need help managing employment contracts in Dubai? Contact Globaine today!