Minimizing Employer Risks and the New Labor law

As an onshore employer, I would like to know what are the key areas of the new Labor law that I must be aware of to minimize my risks and meet my legal obligations?

For onshore entities, the new Labor Law, Federal Decree-Law No. 33 of 2021, (the Law), and its Executive Regulations Cabinet Resolution No. 1 of 2022 (ER) became effective February 2, 2022, and applies to all private sector employees. The Law and ER covers all aspects of the employment life cycle, but it can be useful to think about the Law spread across three main topics. Having a working knowledge of these areas and what the law requires greatly reduces risks to an employer.

The key points for consideration:

  1. Administrative considerations. – Ensuring you have appropriate record keeping and documentation, which include: audited financial statements; hiring records (onboarding and registration processes; visas; signed and archived employment contracts; records of employee payment (including registration with the UAE Wage Protection System (WPS)); provision of employee health insurance policies; recordation of employee leave; processes relating to Emiratization (including payment into General Pension Social Security Authority (GPSSA); end of service calculations; and pension saving scheme records).
  1. Workplace environment. – Providing employees with all relevant information relating to employee duties and rights, including employee handbooks and codes of conduct; social media policies; and all anti-discrimination policies and procedures, (investigation protocol and disciplinary actions). 
  1. End of employment. – Employee rights including: –service of appropriate notice; disbursement of end of service gratuity/pension savings scheme; restrictive covenants, resolution of disputes relating to end of employment and related entitlements.

 

The Law contains a general liability amount in Article 63 which provides for fines from 5,000 – 1,000,000 AED for whoever violates any of the provisions of the Law or the ER.

Key Takeaways/areas of greatest concern/risks:

  • Ensuring Emiratization requirements are met. – Have a plan to recruit and hire Emiratis.
  • Maintaining a respectful and safe work environment for all employees. Draft and implement anti-discrimination policies and complaint procedures and ensure all employees are aware of illegal conduct and how to access complaint procedures;
  • Proper record keeping. Review documents and HR procedures, and update these to ensure compliance with the Law and the ER.

 

The employment lawyer is a necessary bridge between employment issues, the HR department, and compliance with the Law.

Disclaimer

This publication does not provide any legal advice and it is for information purposes only. You should not rely upon the material or information in this publication as a basis for making any business, legal or other decisions. Therefore, any reliance on such material is strictly at your own risk.

Author: Gloria Estolano

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Strategic Partner Gloria Estolano

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Strategic Partner Gloria Estolano

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