Browse through brief employment and labor law updates from around the globe. Contact a Littler attorney for more information or view our global locations.

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End of Transition Period for Limited-term Employment Contracts

New Legislation Enacted

Author: Dr. Luisa Rödemer, Senior Associate – vangard | Littler

The new UAE Labor Law came into force in February 2022 and brought significant changes for employment in the UAE. One of those significant changes was the limitation of employment relationships to limited-term employment contracts only.

To ensure a smooth transition from the former employment law regulations towards the new UAE Labor Law, employers were granted a one year period to prepare for those requirements and to transition all employees onto limited-term employment contracts. This transition period ended February 2, 2023.

Responsibility of Fee Payment for Change in Employee Profession

New Regulation or Official Guidance

Authors: Sara Khoja, Partner, and Sarit Thomas, Knowledge Management Counsel – Clyde & Co.

The Ministry of Human Resources and Social development (MHRSD) has confirmed that the employer is responsible for the following: (1) Fees for changing profession of non-Saudi workers; (2) Fees for residency (Iqama), work license including their renewal, and the fines resulting from delay; (3) Exit and return fees; (4) Non-Saudi workers’ tickets to their home country after the end of the contract between the two parties; and (5) To provide the employee with an experience certificate after the end of the work contract without any charges and must contain the date of joining and last wage.

DMCC Freezone Implements Wage Protection System (WPS)

New Regulation or Official Guidance

Author: Dr. Luisa Rödemer, Senior Associate – vangard | Littler

The Wage Protection System (WPS) was developed by the Central Bank of the United Arab Emirates to provide a safe and secure mechanism to ensure the consecutive payment of the employees’ remuneration in a timely manner. The system is tried and tested and was used in the UAE mainland and selected Freezones for many years.

In February 2023, the Dubai Multi Commodities Centre (DMCC), UAE’s biggest Freezone, also implemented WPS for all registered companies. During the year 2023, the respective authorities will refrain from any fines in case of non-compliance or failures in processes.

Employee Transfers

Important Action by Regulatory Agency

Authors: Sara Khoja, Partner, and Sarit Thomas, Knowledge Management Counsel – Clyde & Co.

The Ministry of Human Resources and Social Development (MHRSD) has confirmed that employee transfers will be done automatically in the event of establishment ownership transfer under the same commercial registry.

Skills Verification Program

Important Action by Regulatory Agency

Author: Sara Khoja, Partner, and Sarit Thomas, Knowledge Management Counsel – Clyde & Co.

The Ministry of Human Resources and Social Development (MHRSD), in cooperation with the Ministry of Foreign Affairs (MOFA) and the Technical and Vocational Training Corporation, launched the Professional Verification initiative to evaluate the skills of foreign workers in Saudi Arabia’s private sector and limit the participation of unskilled workers in the labor market. The program was initially launched in July 2021 and is being implemented in phases with the latest phase applying to select nationals of Bangladesh, who will now be required to have their skills verified in their home country prior to being given a Saudi entry visa.