New UAE labor law changes effective August 31, 2024: What employers need to know

The Ministry of Human Resources and Emiratisation (MOHRE) has made some important changes to the UAE Labour Law that will affect all employers. These updates aim to create a fair and competitive labor market, protect everyone's rights, and clearly outline the responsibilities of employers and employees.

Key changes in the new labor law

1. Heavier fines for breaking the rules:

   • Employers face fines between AED 100,000 and AED 1 million for serious violations like employing workers without permits, misusing work permits or shutting down businesses without settling workers' rights. This also applies to illegal employment of minors.

2. Penalties for fake hiring practices

   • Fake recruitment practices, including pretending to hire Emiratis, will result in hefty fines. The amount of the fine increases with the number of fake employees involved.

3. Simplified process for labor disputes:

   • If there’s a labor dispute and you disagree with a decision made by MOHRE, the case will now go to the Court of First Instance instead of the Court of Appeal. Also, claims must be filed within two years of the end of employment, or they won’t be considered.

4. New powers for MOHRE:

   • MOHRE now has the authority to settle cases of fake employment before going to court, as long as the employer pays at least 50% of the minimum fine and returns any incentives received due to false employment.

5. Court referrals:

   • All current disputes related to employment regulation will be referred to the Court of First Instance starting from the decree’s implementation date, with exceptions for cases already judged or reserved for a decision.

What employers should do now

With these updates, it’s crucial for employers to stay on top of compliance to avoid legal issues and fines. Here’s where Cercli comes in:

• End of service benefits: We handle end-of-service benefits calculations and timely payments, and manage employee rights if operations stop. Plus, we help you project end-of-service accruals so you can allocate funds proactively and avoid unexpected costs.

• Automated document management: Cercli helps you keep track of permits and other important documents, alerting you to any upcoming expiry dates so you never miss a renewal.

• Automatic updates: Our platform automatically incorporates the latest changes in labor laws, ensuring you’re always compliant without the need for manual adjustments.

• Legal support: We offer support and advice related to the new labor law, helping you understand and implement the regulations effectively.

• Efficient compliance: Cercli’s modern payroll and employee data platform simplifies compliance, helping you avoid legal battles and costly fines.

Stay ahead of the curve and let Cercli handle the complexities of compliance, so you can focus on running your business smoothly.

Learn more about how Cercli can streamline your payroll and keep you compliant with the new regulations.

Book a demo to know more here