UAE employers may face AED 1mn fine for worker exploitation
The UAE Government has amended key provisions of the UAE Labour Law, as part of its ongoing efforts to enhance the legislative and legal framework of the country.
The authorities issued the Federal Decree-Law to clarify the rights and obligations of both employers and employees. This move aims to boost the efficiency and competitiveness of the labour market while ensuring legal protection for all involved. Additionally, a new decree imposes strict penalties on employers who violate the regulations, with fines ranging from AED100,000 to AED1 million. Any employer found committing offences such as employing workers without proper permits, failing to provide jobs to workers brought into the country, misusing work permits, or shutting down businesses without settling workers' rights will face penalties. These penalties also apply to the illegal employment of minors as workers.
Furthermore, criminal penalties have been introduced for fake recruitment practices, including fraudulent Emiratisation. Employers found guilty of these practices will face severe fines, which can be increased depending on the number of workers involved. The amendments also streamline the process for resolving labour disputes, allowing cases to be brought directly to the Court of First Instance if disagreements arise with decisions made by the Ministry of Human Resources and Emiratisation. “The Law stipulates that if a dispute arises between the employer, the domestic worker, or the recruitment company and cannot be resolved amicably, the issue must be referred to the Ministry of Human Resources and Emiratisation (MoHRE)… The Ministry is also entitled to resolve disputes if the claim's total amount does not exceed AED50,000 or if the dispute involves one of the parties' non-compliance with a prior amicable settlement decision issued by the Ministry, regardless of the claim's amount. The Ministry's decision in such cases shall have the effect of an executive instrument and be treated as an enforcement order according to standard procedures,” explained MoHRE on the official website.
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The decree grants the Ministry authority to settle cases related to fictitious employment before they reach court, provided that employers pay at least 50 per cent of the minimum fine and return any financial incentives obtained through fraudulent practices. The new law takes immediate effect, with existing disputes being referred to the competent Court of First Instance, unless a judgement has already been issued.