UAE Increases Fines and Penalties for Labour Law Violations: Updated Labour Law

The UAE has recently introduced significant amendments to its Labour Law, reflecting a strong commitment to regulating employment practices and ensuring worker rights. These changes include higher fines, the introduction of criminal penalties, and extended deadlines for employees to file claims. The updates, effective from August 31, 2024, aim to enhance workplace transparency, promote fairness, and strengthen the UAE’s labor market.

Let’s delve into the new changes and understand their implications for employers.

What New Changes Have Been Made?

1. Extended Statute of Limitation
The timeline for filing labour disputes has been extended, giving employees more time to raise claims. This change ensures workers can seek justice even if their claims are delayed due to unavoidable circumstances.

2. Increased Penalties for Employers
Employers found violating labour laws now face substantially higher financial penalties. The updated framework seeks to deter practices such as hiring without proper permits, non-payment of wages, or fraudulent documentation.

3. Wages to Be Paid During Disputes
Employers are now required to pay workers’ wages during the course of disputes unless otherwise determined by the court. This provision protects employees from financial hardships while their cases are under review.

4. Legally Enforceable Decisions by MOHRE
The decisions and rulings by MOHRE are now legally enforceable. This empowers the ministry to take swift action on disputes or violations without requiring extensive judicial proceedings.

5. Criminal Penalties
Severe violations, including falsified Emiratisation or illegal recruitment, can now attract criminal penalties. This ensures accountability at the highest levels of management.

Consulting an experienced labour lawyer in Dubai can provide you with accurate labor law guidance and protection. They ensure compliance with the UAE’s labor regulations and help resolve workplace disputes effectively. An expert lawyer can assist in drafting contracts, handling terminations, and safeguarding employee and employer rights. Their advice ensures smooth employment relationships and legal clarity.

Employer Violations Addressed by the Law: Under Article 60

Article 60 of the previous UAE Labour Law outlined various employer violations and the penalties associated with them. These violations were considered serious offenses and included the following:

• Employing Workers Without Permits: Hiring employees without the necessary work permits was a clear violation of the law.
• Recruiting Workers and Leaving Them Without Work: Hiring workers without providing them actual tasks or duties.
• Misusing Work Permits: Using work permits for purposes other than the ones they were issued for.
• Closing an Establishment Without Settling Worker Rights: Failing to settle employee wages, benefits, or severance before closing or suspending business operations.
• Employing Juveniles in Violation of the Law: Hiring underage workers or juveniles against the legal regulations regarding child labor.
• Agreeing to Employ Juveniles in Violation of the Law: Employers who arranged to hire juveniles without legal consent or in breach of employment laws for minors.
• Fraudulent Recruitment Practices: Hiring workers without following the legal recruitment procedures and regulations.
• Underreporting Wages or Benefits: Not reporting the actual wages or providing workers with less than the legal wage entitlements.
• Failure to Provide Safe Working Conditions: Not meeting health and safety requirements set out by the labour law, potentially endangering workers.
• Non-compliance with Employment Contracts: Violating the terms of employment contracts or failing to provide written agreements to workers as required by the law.

Implications of Updated UAE Labour Law for Employers

The recent amendments to the UAE Labour Law signal stricter compliance requirements for employers. To avoid penalties, businesses should take proactive steps to ensure adherence to the new regulations. Key actions include:

1. Retaining Employee Records: Employers must keep employee records, including payroll and termination documents, for up to seven years. Termination records must be kept for a minimum of two years.

2. Providing Staff Training: Conduct regular training on the new labour law and compliance requirements to ensure all team members are informed.

3. Ethical Recruitment: Ensure all recruitment practices align with legal requirements and the specific purpose of hiring employees.

4. Updating Policies: Review and update internal policies and procedures to reflect changes in the law and ensure compliance.

5. By implementing these measures, employers can avoid legal issues and maintain a compliant workplace.

Conclusion

The updated UAE Labour Law underscores the government’s commitment to ensuring fair and transparent employment practices. Employers must take proactive measures to adapt to the changes, including revising policies, training staff, and maintaining accurate records. By embracing compliance, businesses can avoid penalties, build a strong reputation, and contribute to a thriving, equitable labor market in the UAE.

Need expert guidance? Consult a legal advisor to ensure your business aligns with the latest labor regulations.