Governing Legislation: United Arab Emirates
UAE Federal Decree-Law No. 33 of 2021 (New UAE Labour Law) & Cabinet Resolution No. 1 of 2022
Federal Decree-Law No. 33 of 2021 on the Regulation of Labour Relations represents the most significant overhaul of UAE employment law in decades. Under Article 29, full-time private sector employees are entitled to 30 calendar days of paid annual leave per year after completing one full year of service. The law establishes strict rules regarding leave salary calculation (full wage: basic + housing/allowances), probation period accruals (2 days per month after 6 months), carry forward limits, and termination encashment.
Mandatory Leave Types in United Arab Emirates
Annual Leave
Citation: Federal Decree-Law No. 33 of 2021, Article 29
Entitlement: 30 calendar days per year (or 2 days per month if employed between 6 and 12 months)Fully Paid
Eligibility
All full-time employees in the UAE private sector. Part-time and flexible work arrangements earn leave proportionally based on working hours.
Carry Over & Cash Commutation
Employee may carry forward up to 50% of the annual leave balance to the subsequent year with mutual written agreement, or receive cash allowance in lieu.
Leave salary includes full wage (Basic salary plus housing, transportation, and regular allowances).
Employer must pay the employee their full leave salary prior to the start of their annual leave.
Employer determines the timing of annual leave in accordance with business needs, giving at least 1 month prior written notice.
Upon termination of contract, unused accrued leave is compensated in cash based on the employee's basic salary only.
Sick Leave
Citation: Federal Decree-Law No. 33 of 2021, Article 31
Entitlement: Up to 90 continuous or intermittent days per yearTiered
Eligibility
Available to employees who have completed their probation period. Must notify employer within 3 days and submit an official medical report approved by DHA, DoH, or MOHAP.
Carry Over & Cash Commutation
Non-cumulative; resets at the beginning of each employment year.
First 15 calendar days: Full pay (100%).
Next 30 calendar days: Half pay (50%).
Remaining 45 calendar days: Unpaid (0%).
Employer may not terminate an employee during their statutory paid sick leave period.
Maternity Leave
Citation: Federal Decree-Law No. 33 of 2021, Article 30
Entitlement: 60 calendar days (45 days full pay + 15 days half pay)Tiered
Eligibility
All female employees in the private sector, regardless of length of service. Applies to live births and stillbirths after 6 months of pregnancy.
Carry Over & Cash Commutation
Must be used continuously around delivery.
Additional 45 consecutive or non-consecutive days of unpaid leave available if illness arises from pregnancy/birth.
Mother of a child with special needs/determination receives an extra 30 days full pay + 30 days unpaid.
Female worker is entitled to one or two rest breaks daily not exceeding 1 hour total for nursing for 6 months post delivery.
Parental / Paternity Leave
Citation: Federal Decree-Law No. 33 of 2021, Article 32(1)(b)
Entitlement: 5 working days with full payFully Paid
Eligibility
Available to either the male or female employee upon the birth of their child.
Carry Over & Cash Commutation
Must be taken within six (6) months of the child's birth date; non-cumulative.
Can be taken continuously or intermittently during the 6-month period.
Granted in addition to maternity leave for female employees.
Bereavement / Compassionate Leave
Citation: Federal Decree-Law No. 33 of 2021, Article 32(1)(a)
Entitlement: 5 days for spouse; 3 days for parent, child, sibling, grandparent, or grandchildFully Paid
Eligibility
All employees in the private sector upon producing official death certification.
Carry Over & Cash Commutation
Must commence on the date of death; non-cumulative.
Immediate 5 days paid leave upon death of husband or wife.
3 days paid leave upon death of father, mother, son, daughter, brother, sister, grandfather, grandmother, or grandson.
Study Leave
Citation: Federal Decree-Law No. 33 of 2021, Article 32(1)(c)
Entitlement: 10 working days per yearFully Paid
Eligibility
Employees enrolled in an accredited educational institution in the UAE, provided they have completed at least two (2) years of service with the employer.
Carry Over & Cash Commutation
Granted for sitting examinations; non-cumulative.
Requires proof of examination dates from an accredited UAE university or institute.
Employer Compliance Checklist
Advance Leave Salary Payment
MandatoryDisburse the employee's full wage for their annual leave period before they proceed on leave.
Wages Protection System (WPS) Alignment
High RiskEnsure leave payments reflect accurate basic and allowance distributions matching MOHRE contracts.
Medical Certificate Accreditation
Standard PracticeVerify sick leave medical reports through DHA (Dubai), DoH (Abu Dhabi), or MOHAP portals.
Termination Encashment Formula
MandatoryCalculate final unused leave settlement using Basic Salary (not gross wage) under Article 29(9).
Common Employer Pitfalls
Deducting only basic salary during annual leave rather than full gross wage
Consequence: MOHRE labor complaints resulting in wage claim penalties and company file blockages.
Compliant Action: Pay full wage (basic + housing + transport allowances) during annual leave as required by Article 29.
Allowing unlimited leave accumulation across multiple years
Consequence: Massive unforeseen financial liabilities on corporate balance sheets upon employee departures.
Compliant Action: Implement Employo's automated 50% carry-over cap or schedule mandatory annual leave rotations.
