Federal Decree Law No. 33 of 2021 represents a significant overhaul of the U.A.E.’s federal employment regulations, replacing the current labor law (Federal Law No. 8 of 1980) and related decrees. The intent is to modernize the framework for employment in the private sector to reflect the many changes that have occurred in the U.A.E. since the Federal Law No. 8 was introduced. Such changes include the economy growing by over 700% and the labor force expanding by about 1,500% due to population growth and a massive influx of foreign workers in the private sector (Economist Intelligence Unit data). The new law will come into effect on February 2, 2022, and, like its predecessor, will apply only to the private sector.
Some of the more noteworthy aspects of Federal Decree Law No. 33 include:
Law No. 33 represents a substantial change in U.A.E. employment law. A variety of points in the new law are expected to be clarified by implementing regulations and decrees during the course of December. The new labor law was approved as part of broader reform efforts meant to modernize a variety of federal laws, some of which could also affect companies. Employers should review their current policies and practices to ensure they remain compliant with the new requirements and continue to monitor for further developments. It’s worth noting that — similar to the previous law — employers located in free zones with their own employment legislation (such as the Dubai International Finance Centre – DIFC) will not be subject to these new federal rules.