Dubai is Boosting the UAE’s Economic Competitiveness

With the pandemic causing untold amounts of disruption to travel and business around the globe, the UAE has shifted tactics to improve its economic health. As a result, authorities have rolled out a five-year plan to reform labor laws in a massive effort to boost their economy and improve trade and travel.

This enormous undertaking will make drastic changes to several private-sector labor laws. As part of this initiative, a long-planned visa reformation will begin in January of 2022. A draft of these reforms has been created siting need for economic and legal reforms and Dubai business visa reforms. These laws aim to create a more diverse and accepting business environment for workers of all races and genders.

These reforms are being carefully introduced to attract foreign investors and talent to the region. It’s a strategy that has paid off for the UAE in the past and one that aims to bring Dubai back to the forefront of the global market.

The Benefits of These New Labor Laws

Dubai has enjoyed a vibrant and booming economy for years, quickly becoming one of the most popular international business markets. Investors and businesses travel to the region regularly to conduct business, network, and vacation. And then the pandemic happened. Worldwide, economies shuddered to a stop. With customers locked down and quarantined, many industries closed their doors during this time.

But better days seem to be on the horizon, and as vaccination rates increase and international travel resumes, the forecast is looking quite bright. Seeing this shift in the market outlook, the UAE has leaned into the change, hoping their reforms can:

  1. Ensure efficiency
  2. Attract new talent
  3. Help the UAE keep pace with future developments
  4. Improve the overall business environment for each potential Dubai investor
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New UAE Labor Law Provisions

At this point, you’re probably asking yourself, “what are the new Dubai business laws?” Let’s take a look at a few of the critical decrees coming into effect in 2022.

1. The Prohibition of all forms of coercion in the workplace

This decree states that employers may not use any means to force or threaten employees into providing a service against their will.

2. Prohibition of sexual harassment

Bullying of any form, including verbal, physical, or psychological violence against workers or employees, is prohibited.

3. Prohibition of discrimination and prejudice

Under the new reforms, all forms of discrimination based on race, color, sex, religion, national origin, social origin, or disability are explicitly banned.

4. Equal pay for men and women

All provisions governing the employment of workers shall also apply to women. All women will also be granted the same wage as men for the same position.

5. Enhancing the ease of doing business and labor market flexibility

These reforms also strive to allow employers to benefit from their work and productivity at the lowest operational cost through part-time work, temporary work, and allow employers to continue employing workers after their work contracts have expired.

6. Defining part-time, temporary, and flexible work

These new reforms officially define part-time, flexible, and temporary work. For example, a part-time employee works for an employer for a specified number of hours or days each week. Temporary workers require a specified time frame for their employment. Flexible work is now defined as working hours or days that change according to the volume of work.

7. Payment of wages in any currency

New UAE laws give businesses the ability to pay wages in any currency.

8. Non-disclosure and noncompete clauses

New stipulations will grant companies the ability to prohibit workers from competing with other projects in the same sector.

9. Fixed-term contracts with Unlimited Contracts Properly Defined

This decree specifies that any fixed-term contract may not exceed three years, with the exception of contracts that are extended or renewed by all parties.

10. Worker’s welfare at the core

The new reforms reinforce the concept that workers are the heart of the economy, and their wellbeing should be the most crucial aspect of the UAE’s business world. This decree stipulates that:

• All private-sector employees are entitled to a weekly, paid rest day.

• Workers’ vacation days, including bereavement leave, ranges from three to five days.

• Five days of paternity leave for private-sector workers.

• Employers can no longer withhold the Dubai employment visa of workers.

11. No withholding of documents or inhibiting an employee’s ease of movement

This law prohibits employers from withholding official documents, like passports, from workers. Additionally, workers shall have the right to obtain their wages on the appropriate due date.

12. Defined end-of-service benefits

This provision states that a worker is entitled to an end-of-service gratuity, and full-time foreign workers that have completed one or more years of service shall be paid benefits calculated according to a basic wage.

13. Exemption of workers from paying litigation fees

This reform exempts labor cases from facing judicial fees up to 100,000 dirhams in all stages of litigation, including execution and requests made by employees and their heirs.

Thinking of Working in Dubai? Let MSZ Help!

The UAE government is undertaking an enormous reformation movement to improve the economy in the face of the global pandemic. With more individuals being vaccinated and traveling, business in the region is forecasted to improve significantly in the coming years.

And if you’re a Dubai investor or new business owner thinking about making the jump, you’ve come to the right place! There has never been a better time to form your new business or invest in your future. And one of the best ways to ensure that your business is successful is by using expert business consultants like MSZ consultancy!

MSZ Consultancy is your premier business setup consultant in Dubai, with years of experience helping investors navigate the ins and outs of UAE business. We have the expertise and skill to help streamline your business and maximize your profits, from license applications to business formations.

UAE laws are quickly changing, and you need an expert that can stay up to date on the newest regulations. It doesn’t matter whether you’re a new investor or part of a large corporation; our team of expert business consultants can help! Call us today at +971 52 544 1248.

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