Agency and temporary workers in the United Arab Emirates
Reviewed by Mellow Editorial Team, HR & payroll content team
Hiring someone through a staffing agency or on a fixed-term basis can save time, but the rules around responsibility, entitlements and compliance are specific enough that employers need to understand them clearly before signing any contract.
How agency work is structured in the UAE
In a typical agency arrangement, a worker is employed by a licensed staffing or manpower agency. That agency holds the work permit and visa, pays the salary through its own payroll and is the worker's legal employer on paper. Your business is the end-user — you direct the work, but the contractual relationship sits between the worker and the agency.
This matters because liability is split. The agency is responsible for visa costs, WPS compliance, end-of-service gratuity and social insurance obligations. You are responsible for honouring whatever commercial agreement you have with the agency, and — critically — for the day-to-day working conditions of the worker while they are on your premises.
If the agency fails to pay a worker correctly and that worker raises a complaint with the Ministry of Human Resources and Emiratisation (MOHRE), the Ministry may look at whether your business played a role. Do not assume that using an agency insulates you entirely from scrutiny.
Temporary and fixed-term contracts under Federal Decree-Law No. 33/2021
The 2021 Labour Law standardised contract types. All UAE employment contracts must now be fixed-term; open-ended contracts were phased out. A temporary or project-based engagement is a fixed-term contract with a defined end date, and it is treated the same way as any other employment contract under the law.
That has direct consequences for entitlements:
End-of-service gratuity. A temporary worker who completes at least one year of continuous service is entitled to gratuity. The calculation follows the same statutory formula as any other employee: 21 days' basic wage per year for the first five years, rising to 30 days' per year thereafter, capped at two years' total pay. If the contract ends before one year, no gratuity is owed — but a worker kept on rolling short contracts to avoid that threshold is a practice MOHRE takes seriously.
Annual leave. After one year of service, an employee is entitled to 30 calendar days of paid annual leave. On shorter engagements, proportional leave or leave pay for days accrued applies.
WPS. Whether a worker is temporary or permanent, their salary must be routed through the Wage Protection System. This is the employer of record's obligation, not the end-user's — but if you are directly employing a temporary worker rather than using an agency, it is your obligation.
When you are the direct employer of a temporary worker
Some businesses hire workers directly on short fixed-term contracts, bypassing an agency. In that case, your company holds the work permit, processes the visa, runs payroll through WPS and manages all statutory obligations.
There is no legal category that reduces entitlements simply because a contract is short. A worker on a three-month contract still has the right to be paid on time, to receive any leave they have accrued, and to receive a gratuity if they have passed the one-year mark. The only meaningful threshold in UAE labour law is that first year of service; below it, gratuity does not apply, but all other protections do.
Renewing back-to-back fixed-term contracts is lawful, but MOHRE treats continuous employment as a single period of service for the purposes of gratuity calculations. You cannot reset the clock by letting a contract lapse for a few days.
Emiratisation and agency workers
Emiratisation quotas apply to the business entity that holds the Establishment Card with MOHRE, not to the workers' sponsor. If your business is in a sector subject to Emiratisation targets, agency workers on the agency's payroll generally do not count towards your quota. If hitting your Nationalisation ratio matters for your business licence renewals, confirm with your legal adviser exactly which headcount figures MOHRE uses for your category.
Practical points when engaging a staffing agency
Before signing an agency agreement, it is worth confirming a few things directly:
- The agency holds a valid MOHRE manpower supply licence.
- Salary payment to workers is routed through the agency's WPS account, and you can ask for periodic confirmation of this.
- The contract sets out clearly who bears visa cancellation costs if the engagement ends early.
- Indemnity clauses address what happens if the agency fails to meet its statutory obligations to the worker.
It is also worth considering how Mellow runs payroll across six countries on one platform if you are managing a mix of direct hires and agency arrangements across borders, since consolidating visibility in one place reduces the risk of missing an obligation in any single jurisdiction.
Finally, document the working arrangement clearly. If a dispute arises, MOHRE will look at the economic reality of who controlled the worker's day, who set their hours and who benefited from their output — not just what the paperwork says.
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