The Dubai International Financial Center has released the Employment Law No. 2 of 2019, which provides additional protections to employees (domestic and foreign). The new laws will be implemented on August 28, 2019.
The purpose of the new labor laws are to amend some of the ambiguous points about discrimination and general labor practices that were outlined in the 2005 Employment Law. As reesmarx provides recruiting services in Dubai, we’d like to provide a brief summary of some of the changes and legal compliance requirements that will now be in effect.
Employee Hiring Costs
In the 2005 Dubai Employment Law, there was no guidance provided that would prohibit the costs of recruitment and hiring from being passed on to the employee. In some circumstances, those costs were garnished from the employee by pay period.
The new 2019 Employment Law makes it illegal for employers to collect a fee or charge the employee for costs of recruitment and hiring. Subsequently the employer is no longer permitted to retain the workers legal documentation, including their passport or government issued identification.
The previous 2005 Employment Law directed employers to provide every employee with up to 60 days of sick leave, with 100% salaried paid. The new 2019 Employment Law outlines multiple levels of compensation for medical needs:
- Up to 100% compensation for the first 1-10 days of absence within a 12-month period for full-time employees.
- A payment of 50% of salary for the following 20 days in the same 12-month period of time.
- No additional days paid for sick leave after 30 days within the 12-month period.
The new legal requirements more closely approximate sick leave models used throughout Europe, and reflects a more business friendly policy, while still extending generous benefits for full-time employees.
With over 200 languages and cultures represented in Dubai, the 2005 Employment Law did not make discrimination based on marital status, sex, nationality, religion, mental health or physical disabilities compensatory for employees. In fact, it outlined that employees were not entitled to compensation or legal recourse as a result of being terminated on discriminatory grounds.
The new provisions in the 2019 Dubai Employment Law has added age and pregnancy as two additional criteria for employment discrimination. Employees now have legal recourse to pursue up to one year of wages in compensation.
Termination and Late Payment of Employee Benefits
In the City of Dubai, termination of an employee must be due to reasonable cause. The new 2019 Employment Law provides a detailed test that employers will have to demonstrate, before legally dismissing an employee. Employees also now have the right to written documentation regarding the cause for their termination.
Employers are required to process termination pay within 14 days after the last day of employment, unless the amount is less than one-week of standard pay. Disputes between the employee and employer may be taken to DIFC Courts, and unreasonable employee conduct may delay or negate the payment of termination benefits, depending on the circumstance.
Hours and Benefits for Part-Time Employees
Since 2005, part-time employees in Dubai have been legally entitled to the same sick days and vacation benefits as full-time employees. The new 2019 Employment Laws defines part-time labor as individuals who work less than 8 hours per day and / or less than five work days in a standard week. Entitlement for leave of absence, paid vacation or sick days is now prorated based on hours and length of employment.
As Dubai continues to draw increasing global business investment, the city is committed to providing increased employee protection and labor laws, while keeping Dubai as a business-friendly gateway to Africa, Europe, the UAE and Asian Pacific countries. It is a balance of maintaining the quality social fabric, while encouraging more businesses to expand into the region.
Our global recruitment team at reesmarx was proud to announce our new resourcing hub located in Dubai. The growing demand for skilled and experienced professionals in the region will be served by our team, as we help connect the full spectrum of employees up to C-Level executives with exciting new opportunities in the region.
If your business is planning a global expansion into Dubai, contact us for more information about our Partnership Network, that provides all aspects of services and supports for SMEs and corporations.