Abu Dhabi is the capital and the second most populous city of UAE. The city is the hub of UAE’s commercial and cultural activities and has the two-thirds share in the country’s $400-billion economy. Abu Dhabi holds 9% of the world’s proven oil resources and nearly 5% of the global natural gas resources. Besides oil and gas, retail, real estate, tourism, and infrastructure development are also thriving. The city has also set up free trade zones that are paving the way to substantial foreign investments.
Currency: UAE Dirham
Principal language: Arabic
Government: Local Government under the Department of Municipal Affairs
An Employment contract in Abu Dhabi must be drafted in Arabic, and employees must get a copy. It may be a definite or an indefinite term contract. An employment contract for a definite-term should not be for more than 4 years, but it can be renewed for an equal term if both the employer and employee mutually agree.
The probationary period may not be longer than 6 months, but during probation, the employer may dismiss the employee without giving notice or severance. In the Abu Dhabi Global Market, which is a hub of local, regional and international financial institutions, an employer, as well as employee, can terminate their contract without cause with a 1-week notice but no notice is required for termination with just cause.
Regular work schedule cannot be more than 8 hours per day or 48 during a week in a 6-day week. The workday may be up to 9 hours for certain commercial establishments. During Ramadan, the daily work hours are reduced by 2 hours per day.
Employers are not permitted to make their employees work more than 5 consecutive hours without a break, and these breaks are not added in the employee's working hours.
Friday is the regular weekly rest day for all workers except daily laborers. The UAE government’s weekend follows a 5-day workweek with the weekend on Friday and Saturday, but the private-sector businesses may have their own schedule.
In the Abu Dhabi Global Market Square (ADGM), the following rules on work hour apply:
- average weekly working hours cannot be more than 48 hours in a 7-day period unless the employee's signs a prior written consent to work longer
- rules on reduced Ramadan hours are applicable only to fasting employees in the ADGM.
Employees who work for more than the regular number of hours are eligible to receive overtime pay that is 25% higher than the regular wage rate. The rate of overtime for work done between 9 p.m. and 4 a.m. is 50% over the regular pay.
Overtime work is restricted to 2 hours a day unless such work is essential to prevent a substantial loss, serious accident or to avoid the impact of a serious accident. Overtime rules do not apply to personnel in supervisory or managerial positions.
Employees in Abu Dhabi get fully paid day off during the following 10 public holidays in UAE:
- Jan. 1: New Year's Day
- Birthday of Prophet Mohammed
- Al Isra and Al Mi'raj (Ascension of the Prophet)
- Eid al–Fitr (2 days)
- Eid al-Adha (3 days)
- New Year's Day (Islamic calendar)
- Dec. 2: UAE National Day
Employees receive a 50% bonus along with a compensatory day off or 150% payment of the base salary if they work on a public holiday.
Employees can take 30 days’ paid annual leave after completing 1 year of continuous service with their employers. Employees who have completed 6 months of continuous service but less than 1 year can take 2 days of annual leave for every month of employment.
Employers are allowed to decide on the date for commencing an employee's annual leave and may break the leave into two periods. Carrying over unused annual leave is not allowed. In the ADGM, an employee is entitled to a minimum of 20 days’ holiday after completing 3 months at work. Employees at ADGM are allowed to carry over 5 days of leave every year.
Women employees can go on 45 days of maternity leave, which includes time off before and after childbirth. After completing 1 year of continuous service, an employee is entitled to maternity leave with full pay. Those with less than a year of service get maternity leave at half pay. After returning to work, the new mother is entitled to two 30-minute breaks for breastfeeding and care of her child without any pay deduction.
In the ADGM, women employees are entitled to a maternity leave of 65 days for birth or adoption of a child provided they complete 12 months of employment. Payment for the first 33 days of the employment is in full and a half for the remainder.
Employees in the ADGM are entitled to 5 days of paternity leave that they need to take within 2 months of childbirth.
Employees in Abu Dhabi are entitled to the annual sick leave of 90 days when they complete 3 months at work after the probation period is over. Payment for the first 15 days of sick leave is 100%, 50% for the subsequent 30 days, and there is no payment for the remaining leave. Sick leave benefit is not paid for an illness caused by the employee’s misconduct, such as consumption of narcotics or alcohol.
Sickness benefit is payable even if an employee resigns before 45 days are over due to medical reasons. Employers are under a legal obligation to provide health insurance to their employees as well as their dependents in Abu Dhabi. In the ADGM, employees get 60 days of paid sick leave after completing 1 month of employment. Employees exceeding their sick leave for more than 60 days can be terminated with a written notice immediately.
All Muslim employees must be allowed an unpaid leave of 30 days for going to Mecca for the Hajj pilgrimage. Such a leave can be taken only once in the course of employment and not be deducted from a period of other leaves for which the employees are eligible.
Pension for GCC Nationals
Employees belonging to Gulf Cooperation Council (GCC) nations receive a pension according to the scheme established in their own country. GCC citizens working in a GCC member country other than their home receive the pension.
Health Insurance Plan
According to the Abu Dhabi Law, subscribing to a scheme of health insurance is mandatory for employees and their family who are non-UAE nationals. It is optional for others. Employees must get adequate insurance coverage for those they sponsor, such as a husband sponsoring a wife. Employees may need to pay for up to 50% of their policy’s premium, and the same percentage of policy premium for their dependents (determined by their age). If an employer does not agree to cover these costs, it is mandatory for employees to pay for it from their income. The annual premium for basic coverage is 800 Dirhams and 5,500 Dirhams for employees above the age of 60. A maternity surcharge of 750 Dirhams applies for a female in the age bracket of 18 and 50 years.
In the case an employee suffers from a work-related injury or occupational disease, the employer needs to report the police and pay the expenses of the employee’s treatment till recovery or declared disabled. Full salary is payable to the employee for 6 months until recovery, declaration of disability or death, whichever happens first.
On the death of an employee due to work-related sickness or injury, the employee’s family is eligible to receive remuneration equal to 24 months of the employee’s wages, subject to a maximum of 35,000 Dirhams and a minimum of 18,000 Dirhams. If an employee gets permanently disabled due to a work-related injury, then he/she is entitled to receive the same amount as compensation the dependents would have received as a survivor benefit. Pro rata compensation is paid in case of partial disability.
How GPS can Help
With our Global PEO/Employer of Record services, companies can expand into Abu Dhabi and hire their employees without having to establish a branch office or subsidiary in Abu Dhabi.
- Your candidate is hired via our Abu Dhabi PEO. If needed, we can also help you find the right talent in any country with our comprehensive global staffing services.
- Your new employee begins work quickly as we take care of employment contracts, statutory and non-statutory benefits, and running their payroll - all in full compliance with Abu Dhabi laws.
- Global PEO Services experts manage all day-to-day operational issues such as employee expenses, and severance/termination if required.
- With no contractor risks, pass on the compliance burden to Global PEO Services.
Spin Off/M&A Support
- Ensure continuity of payroll, benefits and HR support when acquiring or spinning off a business with employees overseas.
24/7 Support in 100+ Countries
- Empower your teams with 24/7 support and a single point-of-contact model in which experienced client services directors are in continuous communication with information and advice.
- We are backed by a mix of 300+ multidisciplinary experts from HR, Payroll, Finance, Tax, and Legal domains who are ready to respond to the expected and unexpected needs of your business on the shortest notice.
Easy Visibility into Your Employee Time & Attendance and Benefits Data
With our Global PEO, you get access to Mihi, our proprietary SaaS solution for time and attendance, vacation, leave management and benefits enrollment and management. Mihi enables clients to have easy access to employee data in real time. It is designed specifically for companies with a global workforce, especially when working in multiple countries with low headcount.
Ready for Growth When You Are
When ready, we can seamlessly transition you from the PEO/EOR model to your own legal entity and provide ongoing international HR, finance, legal, compliance and staffing support. Learn more about our end-to-end international expansion services.