Hiring Your First Employee in Dubai: Work Permits, Employment Contracts and the Wage Protection System

Reviewing and signing documents at an office table. Photo: cottonbro studio / Pexels — Pexels License (free for commercial use). Source: https://www.pexels.com/photo/a-person-signing-a-contract-6814521/

Hiring your first employee in Dubai involves more than agreeing on a salary and issuing a visa. The employer must complete a sequence of labour, immigration, identity, insurance and payroll steps. Missing one of them can delay onboarding, prevent a work permit from being issued or restrict the company’s ability to hire additional workers.

This guide focuses on private-sector employment in Dubai and explains the main federal requirements, together with the areas where mainland and free-zone procedures may differ.

The correct order for hiring an employee in Dubai

For a typical mainland private-sector employer, the process usually follows this order:

1. Obtain the company’s trade licence and register the establishment with the relevant labour and immigration authorities.
2. Confirm that the company has an available work-permit quota.
3. Issue the official job offer and employment contract through the applicable authority.
4. Apply for the employee’s work permit.
5. Arrange an entry permit or in-country status change, where required.
6. Complete medical fitness testing and the Emirates ID application.
7. Arrange the residence permit and maintain the required health insurance.
8. Register the employee in payroll and the Wage Protection System where applicable.
9. Maintain employment records, pay wages on time and monitor renewals and compliance obligations.

The exact route depends on the employee’s nationality, current immigration status, job, company classification, business activity and location.

Establishment card, immigration file and work-permit quota

Before a mainland company can sponsor employees, it generally needs an active establishment file with the Ministry of Human Resources and Emiratisation (MoHRE), including the relevant establishment card and authorised signatory arrangements. The company also needs the appropriate immigration file or establishment card with the relevant residency authority.

These registrations do not automatically mean that every visa or work permit will be approved. The company must also have sufficient quota and meet the conditions for the requested occupation.

MoHRE’s quota assessment can take account of factors such as:

• The company’s valid trade licence and registered activity
• The size and suitability of the workplace
• Existing employees and business requirements
• The requested profession and its compatibility with the licensed activity
• The company’s compliance status and classification
• Supporting information about projects or operational needs

A quota is not the same as a work permit. The quota is the available capacity; an individual work permit is the authorisation for a particular employee and role.

The official employment offer and contract

For a MoHRE-regulated employer, the hiring process should use the current MoHRE-approved job offer and employment-contract workflow. A private offer letter or internally drafted contract should not replace the official process.

The employment contract should accurately reflect the agreed role, remuneration, workplace, working hours, start date, contract term, probation period, leave entitlement and notice period. The employment terms filed with the authority should match the terms actually offered to the employee.

Fixed-term and unlimited contracts

Under the current UAE Labour Law, private-sector employment relationships are regulated through fixed-term contracts. The parties may agree the duration, and the contract can be renewed or extended.

“Unlimited” contracts belong principally to the former legal framework. Existing unlimited contracts were required to be converted in accordance with the current law. Employers hiring today should not assume that an unlimited-contract template remains appropriate.

A contract may also specify the applicable work model, including full-time, part-time, temporary, flexible, remote or job-sharing arrangements. The rules for leave, gratuity and work permits can differ according to the work model.

The contract should be prepared in the format required by the relevant authority. For MoHRE-regulated employment, use the current MoHRE system rather than relying only on a bilingual private document.

Work permits: the employee must be authorised before working

Federal labour law prohibits a person from working in the UAE without a valid work permit. Employers must not allow a new hire to begin work while waiting for the permit, residence status or another required approval.

MoHRE offers different permit categories, including permits for:

• Recruiting a worker from outside the UAE
• Transferring a worker between establishments
• Hiring a resident sponsored by a family member
• Part-time, temporary or mission work
• Hiring a UAE or GCC national
• Hiring certain residence-visa holders, such as Golden Residency holders

The correct permit depends on the employee’s circumstances. The occupation must be compatible with the company’s business activity, the trade licence must be valid and the employee may need certificates or professional approvals for regulated roles.

A company’s failure to comply with labour regulations or the WPS can also affect the issuance or renewal of later work permits.

Residence visa, medical fitness and Emirates ID

Once the appropriate work-permit process has started, the employee’s immigration steps depend on whether they are entering the UAE from abroad or changing status from inside the country.

For an employee aged 18 or above applying for a residence visa, medical fitness testing is required. The employee must attend an approved medical fitness centre and satisfy the applicable health requirements for residence.

The employee must also apply for an Emirates ID through the Federal Authority for Identity, Citizenship, Customs and Port Security (ICP). The application may involve identity verification, a photograph and biometrics, depending on the applicant and the application route.

Medical fitness testing and an Emirates ID application do not, by themselves, authorise employment. The work permit and immigration status must be completed through the correct channels.

For a Dubai-sponsored residence process, the relevant Dubai residency authority is GDRFA Dubai. In other emirates, the process may involve ICP or another relevant authority. Employers should not assume that a Dubai procedure applies identically elsewhere.

Health insurance in Dubai

Health insurance is a separate compliance requirement. Dubai’s health-insurance framework requires employers, including employers in Dubai free zones, to provide qualifying health insurance for employees and bear the required cost. The policy must remain valid during employment.

The applicable insurance product and evidence requirements can vary according to the employee, employer and visa process. Employers should arrange cover early rather than treating it as an optional benefit or leaving it until the end of the visa application.

Signing an employment document at a desk. Photo: Andrea Piacquadio / Pexels — Pexels License (free for commercial use). Source: https://www.pexels.com/photo/crop-businessman-giving-contract-to-woman-to-sign-3760067/

The Wage Protection System

The Wage Protection System (WPS) is an electronic salary-payment and monitoring system developed by the UAE Central Bank and used by MoHRE to monitor wage payments.

MoHRE-regulated establishments generally must pay employee wages through WPS or another approved channel. Payments are processed through authorised banks, exchange houses or financial institutions.

Under the WPS rules published for 2026:

• Wages for the previous month are due on the first day of each Gregorian month.
• Employers must transfer at least 85% of the total wages due on time, subject to lawful deductions and the applicable rules.
• Electronic alerts and monitoring begin when payment is delayed.
• From the fifth day after the due date, MoHRE may suspend the issuance of new work permits.
• Further delays can result in reclassification, administrative fines, labour-dispute procedures and wider work-permit restrictions, depending on the employer’s size, sector and history.

The 85% compliance threshold should not be misunderstood as permission to withhold the remaining wages. Employees remain entitled to the wages agreed in the contract and required by law.

Some categories of employers and workers are excluded from WPS compliance under the applicable resolution. Free-zone employers should confirm whether they are registered with MoHRE or subject to a separate authority’s payroll process.

Probation and notice periods

A probation period may not exceed six months and cannot be imposed more than once by the same employer for the same employee.

If the employer terminates employment during probation, at least 14 days’ written notice is required. If the employee intends to move to another UAE employer during probation, the employee must generally give at least one month’s written notice. If the employee is leaving the UAE, the notice requirement is generally 14 days.

After probation, the contractual notice period must be between 30 and 90 days. The notice provision should be clearly written in the official contract and applied consistently.

Working hours, annual leave and gratuity

For most private-sector employees, normal working hours are up to eight hours per day or 48 hours per week. Employees working more than five consecutive hours must receive breaks that are not counted as working time. Overtime is regulated and is generally limited to two additional hours per day, subject to the law and applicable exceptions.

Annual leave is generally:

• 30 fully paid days after completing one year of service
• Two days per month where service exceeds six months but is less than one year
• Pay for the legally accrued unused balance when employment ends

For a full-time foreign employee who completes at least one year of continuous service, end-of-service gratuity is calculated on the last basic wage:

• 21 days’ basic wage for each year during the first five years
• 30 days’ basic wage for each year after the first five years
• A total maximum of two years’ wage under the statutory gratuity rules

The employer must generally settle outstanding wages, leave entitlements and gratuity within 14 days after termination. Employers participating in the voluntary alternative end-of-service Savings Scheme must apply the scheme rules to enrolled employees instead of the traditional calculation for the relevant period.

Mainland versus free-zone hiring

Federal labour law applies broadly to UAE private-sector employment, but the administrative route is not identical everywhere.

A mainland company normally deals with MoHRE for work permits, contracts and labour-file matters, together with the relevant residency authority. A free-zone company may process employment matters through its free-zone authority, through MoHRE or through a combination of authorities, depending on the zone and employee category.

Do not assume that a quota, contract form, payroll process, insurance procedure or cancellation step used in one free zone applies in another. Before recruiting, confirm:

• Which authority issues the employment permit
• Whether the company is registered with MoHRE
• Which employment contract form is required
• Whether WPS applies and through which channel
• Which authority handles the establishment and immigration cards
• Whether the free zone has additional office, insurance or HR requirements

Common first-time employer mistakes

The most avoidable problems include:

• Letting the employee start work before the work permit is issued
• Using a private contract that does not match the official registered offer
• Choosing a job title that does not fit the company’s licensed activity
• Assuming a trade licence automatically provides unlimited visa capacity
• Delaying medical testing, Emirates ID or health-insurance arrangements
• Paying salary by cash or informal bank transfer instead of the required WPS route
• Treating probation as a period with no notice obligations
• Calculating gratuity on total salary instead of basic wage
• Missing work-permit, residence, insurance or licence renewal dates
• Applying mainland procedures to a free-zone company without checking the zone’s rules

Final checklist

Before the first employee starts, confirm that the company has:

• An active trade licence and establishment registrations
• Sufficient work-permit quota
• The correct official offer and employment contract
• A valid work permit
• The required entry or status-change approval
• Medical fitness and Emirates ID applications completed as required
• Residence status and Dubai health insurance arranged where applicable
• Payroll and WPS registration prepared
• A system for monitoring renewals, leave, salary payments and end-of-service obligations

PJ Advisory helps entrepreneurs with company formation, residency visas and Emirates ID processing, together with ongoing compliance support and deadline notifications. If you are hiring for the first time, contact PJ Advisory to discuss the correct process for your company’s mainland or free-zone structure.

Sources / References

1. Federal Decree-Law No. 33 of 2021 on the Regulation of Labour Relations, UAE Legislation, issued 2021; effective 2 February 2022; current text checked 1 October 2026.
2. Cabinet Resolution No. 1 of 2022, Executive Regulation of the Labour Relations Law, issued 2022; effective 2 February 2022; current text checked 1 October 2026.
3. UAE Government: Employment contracts, duration and models, updated 12 August 2026.
4. UAE Government: Work permits, updated 24 September 2026.
5. MoHRE: Work Permit Quotas for Establishments (service page), current service page checked 1 October 2026; page date not displayed.
6. UAE Government: Annual leave and official leaves, updated 24 September 2026.
7. UAE Government: Working hours and overtime, updated 12 August 2026.
8. UAE Government: Payment of wages and WPS, updated 25 September 2026.
9. Ministry of Human Resources and Emiratisation: official services and resolutions portal, current official portal checked 1 October 2026; page date not displayed.
10. Central Bank of the UAE: UAE Wage Protection System, official page checked 1 October 2026; page date not displayed.
11. UAE Government: General provisions for residence visas, updated 28 September 2026.
12. ICP: Apply for a new Emirates ID card, current service page checked 1 October 2026; page date not displayed.
13. UAE Government: End-of-service benefits for private-sector employees, updated 12 August 2026.
14. Dubai Health Authority: Health Insurance and the Dubai Health Insurance Corporation, official page checked 1 October 2026; page date not displayed.