An HR checklist for new UAE employers
Reviewed by Mellow Editorial Team, HR & payroll content team
Setting up employment in the UAE correctly from day one means registering with the right authorities, enrolling staff in mandatory schemes, and running a compliant payroll before anyone receives their first salary. Miss a step early and you face fines, back payments, or WPS blocks that freeze salary transfers.
Company and employer registration
Before you hire anyone, your trade licence must be active and your establishment must be registered with the Ministry of Human Resources and Emiratisation (MOHRE). This registration gives you an establishment card, which is the foundation for every work permit and labour card you will issue.
Free zone employers register with their relevant free zone authority rather than MOHRE for most employment matters, though the rules vary by zone. Confirm with your free zone which labour regulations apply — some adopt federal Labour Law in full, others operate partial equivalents.
If you are a mainland employer hiring UAE or GCC nationals, you also need to register with the General Pension and Social Security Authority (GPSSA). Expatriate employees are not enrolled in GPSSA; their retirement benefit is the end-of-service gratuity instead.
Contracts and offer letters
Every employee must have a written employment contract before they start work. Under Federal Decree-Law No. 33/2021, all contracts are fixed-term (maximum two years, renewable). Open-ended contracts issued before the law changed should already have been converted; any new hire must go on a fixed-term agreement.
The contract must state: job title, basic wage, allowances, working hours, and the notice period. Keep a copy on file — MOHRE can request it during inspections. If you employ someone on a probation period, it cannot exceed six months, and notice during probation is shorter than standard notice.
Wage Protection System enrolment
The Wage Protection System (WPS) is mandatory for mainland employers and most free zone establishments. It requires you to pay salaries through an approved bank or exchange house so MOHRE can verify that wages are paid on time and in full.
Steps to get operational on WPS:
- Open a UAE corporate bank account (most banks activate WPS functionality automatically).
- Register your establishment on WPS through your bank or an approved agent.
- Submit a Salary Information File (SIF) each payroll cycle — this maps each employee's Emirates ID to the amount paid.
- Pay salaries by the date stated in the contract; mainland rules generally require payment within 10 days of the due date.
Late or missing WPS payments trigger fines and can result in a ban on new work permits.
End-of-service gratuity calculation and provisioning
Expatriate employees are entitled to end-of-service gratuity under Federal Decree-Law No. 33/2021. The calculation uses basic wage only (not allowances):
- Years 1–5: 21 days' basic wage per year of service.
- Year 6 onwards: 30 days' basic wage per year of service.
- Cap: total gratuity cannot exceed two years' total basic wage.
Gratuity is not funded in a separate account by default — most employers carry it as a balance sheet liability. If your headcount grows, that liability grows too. Some employers voluntarily use a third-party gratuity fund to pre-fund the obligation; this is worth considering from the start rather than retrofitting later. For more on how payroll obligations stack up across different hiring structures, see how Mellow runs payroll across six countries.
Leave entitlements and working hours
Annual leave is 30 calendar days per year after 12 months of continuous service. Employees who have completed at least six months but less than one year are entitled to two days per month. Confirm your HR system or payroll tool accrues leave on a calendar-day basis, not a working-day basis — it is a common source of errors.
Public holidays are set by government decree each year. Sick leave entitlement under federal law is 90 days per year (15 days full pay, 30 days half pay, 45 days unpaid), after the probation period ends.
Emiratisation targets
If you are a private sector employer with 50 or more employees, Emiratisation quotas apply. The current scheme (Nafis) requires you to increase the share of UAE nationals in skilled roles annually. Failing to meet your target results in a monthly contribution per unfilled quota position. Check your current target on the MOHRE portal — it is calculated by company size and sector.
Employers below 50 staff are not subject to the same quota rules but should still maintain an accurate headcount record on MOHRE systems, as thresholds can be reached quickly during a growth phase.
Record-keeping and ongoing compliance
Maintain personnel files for every employee: contract, passport copy, Emirates ID, visa documentation, and any disciplinary or performance records. MOHRE inspections can be unannounced. Payroll records must be retained for a minimum period — keep at least five years of records as a conservative standard.
Review your WPS submissions, gratuity provisions, and leave balances at least quarterly. The cost of correcting errors compounds the longer they go unaddressed.
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