UAE Labour Law 2026: What Just Changed and What You Must Do Now

The UAE's labour framework has moved through several significant updates this year, from stricter Wage Protection System (WPS) enforcement and new labour accommodation standards to a full overhaul of the ADGM employment regulations. Employers are now navigating compliance while managing business continuity through a period of regional disruption.

In our recent greytShift webinar, "UAE Labour Law 2026: What Just Changed and What You Must Do Now," we sat down with employment law experts from Clyde & Co to unpack the legal changes effected and what HR teams need to do about it:

• Elodie Chalhoub, Senior Associate, Clyde & Co Employment Group
• Yuliya Dinte, Associate, Clyde & Co Employment Group

Here are the top four actionable takeaways from their discussion.

1. The Midday Work Ban and Labour Accommodation Rules Are Being Enforced More Closely

The UAE's midday work ban, which prohibits outdoor work under direct sunlight between 12:30 pm and 3:00 pm from 15 June to 15 September, isn't new, but it remains a live compliance risk for any business with outdoor or on-site staff. Employers must adjust working hours, and provide shade, rest areas, and cooling equipment, with limited exemptions for essential or safety-critical work.

Alongside this, Ministerial Resolution No. 122 of 2026 has introduced enhanced labour accommodation standards for employers with 50+ workers earning AED 1,500 or less a month - covering everything from ventilation and drinking water ratios to CCTV coverage and supervisor-to-worker ratios. As Yuliya Dinte put it, the direction of travel is clear:

"Employers must adjust their working hours, provide suitable shade and rest areas... [and] accommodation owners must register worker accommodation and resident details with the ministry and keep this information updated."

Action for employers: Audit current accommodation arrangements against the updated requirements, and make sure MOHRE registration records are accurate and current.

2. WPS Enforcement Has Tightened - Salaries Must Clear by the 1st of the Next Month

The single most immediate change for most UAE employers is on payroll timing. As of June 2026, salary for any given month must be paid by the 1st of the following month, even if that date falls on a weekend. Elodie Chalhoub was direct about what's at stake:

"If for some reason your business pays salaries after the first of the next month, I would say definitely you need to change that and ensure that you are compliant to avoid any suspension on the trade license, work permits, or additional fines."

Non-compliance escalates quickly: a warning, followed by suspension of new and renewal work permits by day five, then rising fines and potential referral to public prosecution. Employers should also note the compliance threshold for the percentage of workforce and salary paid on time has moved from 80% to 85%, which creates a narrower and not yet fully clarified deduction window against the labour law's 20% salary deduction cap.

Action for employers: Confirm your payroll cycle clears comfortably before the 1st of each month, and formalise any salary advances or unpaid leave through properly signed WPS-registered agreements.

3. ADGM Employers Are Operating Under a Materially Different Rulebook

For companies incorporated in the Abu Dhabi Global Market, the ADGM employment regulations (in force since April 2025) diverge sharply from mainland labour law. Written contracts must be signed within one month of a hire's start date, working hours are capped at 48 per week unless an employee opts out in writing, and notably overtime pay is not mandatory and can be contracted out of, unlike under the federal labour law. Elodie Chalhoub flagged this as one of the more consequential shifts:

"In the ADGM, it is possible that you agree with the employee in the employment contract that they will work above the 48 hours without getting paid overtime."

Discrimination and victimisation claims also carry far higher exposure in the ADGM up to three years' compensation, compared to one year in the DIFC and none under the federal labour law. Employers with ADGM entities should treat this as a standalone compliance track, not an extension of their mainland policies.

Action for employees: Review ADGM contracts, working-hours clauses, and anti-discrimination policies separately from your mainland framework - the two regulations don't map onto each other.

4. Regional Disruption Calls for Documented, Mutual Measures, Not Unilateral Ones

With project suspensions and closures affecting hospitality, consultancy, and retail across the region, employers are leaning on annual leave, unpaid leave, remote work, and restructuring to manage headcount without immediate termination. The recurring theme from the panel: none of these measures hold up unless they're properly documented. On unpaid leave specifically, Elodie Chalhoub was clear that it can't be imposed:

"The law recognizes unpaid leave as a mutual agreement between the employer and the employee... it needs to be drafted as an agreement, because we've seen a lot of cases where companies place someone on unpaid leave as a unilateral decision" and later face disputes over unpaid salary and accrued benefits.

Similarly, restructuring-driven terminations (the UAE's closest equivalent to redundancy) carry no mandatory enhanced severance, only standard notice, accrued leave and gratuity, but courts expect employers to have at least communicated the restructure and given employees a clear explanation before termination.

Action for employers: Put every leave, remote-work, or restructuring arrangement in writing, get employee sign-off where the law requires mutual agreement, and register unpaid leave through the correct WPS appendix.

Four takeaways, one common thread: documentation.

Whether it's payroll timing, accommodation records, ADGM contracts, or leave arrangements, the employers who come out ahead are the ones treating compliance as an ongoing discipline rather than a once-a-year checklist. Review your policies against these updates now, before an audit or dispute forces the question.

Want to go deeper on any of these updates? To know more, watch the full webinar here: https://youtu.be/LXSevqhrBwA