The UAE has established a vigorous legal framework to maintain cordial, healthy relationships between employers and employees, aiming to protect both parties and maintain harmony in the working environment. Non-compliance with employment regulations in UAE Mainland can lead to harsh penalties, including fines, suspension of licenses, and even criminal charges in some situations. Below is a detailed overview of the penalties that can be faced due to non-compliance with employment regulations.
Delayed or Non-Payment of Wages
Article 22 of the Federal Decree law and Article 16 of the Executive Regulations puts across strict instructions about the timely payment of wages as agreed in the employment contract. It is also the duty of the employer to submit required proof to the Ministry, if asked, the proof of payment to its employees and can only pay them via a Ministry approved system. If found not paying the employees’ wages on time, then due action could be taken and can also result in attracting fines.
Disambiguation: This article discusses UAE Federal employment laws. For ADGM labour laws, please refer to ADGM Employment Laws. For DIFC labour laws, please refer to DIFC Employment Laws.
The Ministry of Human Resources and Emiratisation (MOHRE) can impose fines ranging from AED 5,000 to AED 50,000 per employee. For repeated violations, the fines can be doubled.
In addition, the employer might face suspension of the ability to issue new work permits.
Termination/Dismissal
Article 44 of the Federal Decree Law specifies proper reasoning-based termination for an employee. An employee could be removed without notice for different reasons such as, if the employee is found to be submitted forged documents or impersonating them as someone else. The organization and the employee will have a set of instructions and rules that they will have to abide by and follow, if the employee is found to be breaching that they could be dismissed immediately.
Non-Compliance with Health and Safety Standards
Under Article 22 of the Executive Regulations law, employers are required to maintain proper health and safety conditions in the workplace. It is the duty of the employers to inform all their employees beforehand about any work/situation that could have a possibility in risk, such as fire breakouts or any disease from their workplace that could occur while employment. It is must by the employers to ensure to always double check to maintain a sanitized place, and to take appropriate measures to reduce the possibility of an incident occurring as much as they can. In addition to all of this, it would be much more beneficial for the employee if the employer took extra steps and displays the sign boards either in Arabic or in a language that most of the employees would understand, as it would result in a much safer surrounding.
Not abiding by these and violating related to inadequate workplace safety can lead to fines ranging from AED 10,000 to AED 100,000, depending on the severity of the non-compliance. Repeated violations may lead to suspension of business activities and criminal liability in cases of severe injury or death.
Failure to Provide End-of-Service Benefits
Article 51 of the law stipulates that employees who have completed at least one year of continuous service are entitled to end-of-service gratuity. A payment of 21 days’ worth for each year worked, for the first 5 years of service, further to that a payment of 30 days’ worth for each year more than 5 years of service. The unpaid days of absence from work may not be included in the final calculation of the EOSB. If there is any amount payable from the employee with measures to the law or a judgement, then the employer may further deduct from the EOSB.
If found the employers failing to pay these benefits upon termination of employment may be required to pay additional fines, along with the gratuity itself. The penalties would range from AED 1,000 to AED 10,000 per affected employee.
Violation of Working Hours and Overtime Rules
Article 17 limits the number of working hours to eight per day and 48 per week, with provisions for overtime. However, some employers with proper approval from the Ministry may increase, decrease and work around the timings of a few of their employees in accordance with their comfortability and requirement for their job. The commuting time between work and residence would not be calculated into the working hours, however with a few rare exceptions. The working hours in Ramadan would be reduced to 6 hours per day.
Employers that violate working hours regulations, including improper overtime payments, face fines of up to AED 50,000. Repeated breaches may result in harsher penalties, including the suspension of the employer’s business operations.
Discrimination and Harassment
Article 4 prohibits discrimination and harassment in the workplace. It is illegal for an employer to discriminate based on race, color, gender, religion, or nationality.
If an employer is found to be doing discrimination or harassment in the workplace can face fines ranging from AED 20,000 to AED 100,000. If this continues repeatedly then the offenses may result in the suspension of the company’s activities and criminal proceedings.
Employment of Workers without a Valid Permit
It is strictly never permitted for an employee to be employed without a valid work permit and as stated in Article 6 it mandates and makes it a basic requirement for all employees to have a valid work permit issued by MOHRE. The employer is always prohibited from charging any of their workers any fees or costs for recruitment.
If hired employees are found without a valid work permit it may result in fines starting at AED 50,000 per worker and can go up to AED 200,000 for repeated violations. The employer could also face a suspension of work permits for new hires.
Non-Compliance with Annual Leave and Public Holidays
These two Articles, Article 28 and Article 29, outline the minimum entitlement to annual leave and public holidays for employees. Article 28 mentions Public Holidays and if any employee is found working in those breaks or weekends, then the employer must compensate them with the necessary pay or leave.
Article 29 mentions Annual Leave wherein every employee is entitled to leave with their full wage payment.
Failing in compiling with these rules will result in fines of up to AED 50,000 that may be imposed on employers who deny their employees leave entitlements.
Non-Compliance with Emiratisation Requirements
According to the Executive Regulations and MOHRE guidelines, certain companies must meet specific number of hiring UAE nationals. Fines for non-compliance with Emiratisation requirements can reach AED 6,000 per month per non-compliant position. The employer’s ability to obtain new work permits can also be restricted.
Failure to Maintain Employee Records
Article 6 of the Executive Regulations mandates employers to maintain accurate employee records, including wage data, contract details, and attendance records. It is essential and beneficial for the employers to keep a record of the documents of their employees as it can always be helpful to look back for whatsoever reason. If employers fail to do so it would amount to fines that can range from AED 5,000 to AED 50,000 per missing or inaccurate record.
Violating Rules on Juvenile
Article 5 outlines strict rules regarding the employment of juveniles (below 15 years). To employ a juvenile has various conditions and the requirement of authority from legal guardian is a must. The health fitness of the juvenile is a must and a written confirmation of the same is needful, and the working hours should never be put from 7 PM to 7 AM. Actual working hours cannot exceed more than 6 hours per day and must also include one break, or more. Not following the laws can lead to penalties and fines of AED 10,000 to AED 100,000.
Conclusion
Non-compliance with employment regulations in UAE Mainland can result in heavy fines and penalties that can result in a negative image of any business’s operations. Employers must be persistent in adhering to these regulations to avoid legal consequences and ensure a decent rapport within the business community. It is always advisable that one consults with legal professionals to help ensure compliance and mitigate risks associated with violations.
