UAE Clarifies Annual Leave Regulations for Employees
The Ministry of Human Resources and Emiratisation (MoHRE) in the United Arab Emirates has released updated guidelines on annual leave entitlements and the rules governing the carry-forward of unused vacation days. These new clarifications are intended to help employees and employers better manage time-off policies and ensure compliance with the country’s labor laws.
Annual Leave Entitlements Under UAE Law
Under Federal Decree-Law No. 33 of 2021 and Cabinet Resolution No. 1 of 2022, employees who have completed one full year of continuous service with an employer are entitled to a minimum of 30 days of fully paid annual leave. For workers who have been employed for more than six months but less than a year, leave is accrued at a rate of two days per month.
Typically, once an employee reaches the one-year mark, the full annual leave balance is credited. Employers are required to coordinate with staff to schedule time off, usually giving advance notice to ensure both business continuity and employee convenience.
Rules on Carrying Forward Unused Leave
The new guidance confirms that unused annual leave can be carried forward to the following year, but only under specific conditions. Importantly, both the employer and the employee must mutually agree to the rollover. Furthermore, the number of days that can be transferred is capped.
According to the clarification, employees are allowed to carry forward up to half of their annual leave entitlement. For example, someone eligible for 30 days of leave may only move a maximum of 15 days into the next calendar year, provided they have received approval from their employer.
Compensation for Unused Leave Upon Termination
The regulations also address the scenario in which an employee leaves the organization before availing their entitled leave. In such cases, the law mandates that employers must compensate employees for any unused annual leave. The compensation is to be calculated based on the employee’s basic salary, ensuring fair remuneration for the time off not taken.
Restrictions on Accumulating Leave Over Multiple Years
In a move to encourage employees to take breaks and support workplace wellbeing, the Ministry has imposed limits on the accumulation of leave over multiple years. Employers are not allowed to prevent staff from using their accumulated leave for more than two consecutive years, unless the employee chooses to defer the leave or opts for financial compensation instead.
This provision ensures that employees take time off regularly, preventing burnout and promoting a healthier work-life balance.
Balancing Operational Needs With Employee Wellbeing
The revised guidance reflects the UAE’s commitment to balancing business requirements with the welfare of its workforce. By clearly outlining the rules surrounding annual leave and unused days, the Ministry aims to remove ambiguity and enhance transparency in workplace practices.
The policy also encourages open communication between employees and employers, fostering a culture of mutual respect and compliance with national labor standards.
Key Takeaways for Employers and Employees
- Employees are entitled to 30 days of fully paid annual leave after one year of service.
- Those with 6-12 months of service accrue leave at 2 days per month.
- Unused leave can be carried forward to the next year, but only with mutual agreement and up to 50% of the total entitlement.
- Employees who exit a company before taking their leave must be compensated based on basic salary.
- Employers cannot block leave for more than two years unless the employee defers it or requests compensation.
These revisions promote a more structured and fair approach to time-off management across UAE workplaces and align with the country’s vision of fostering a productive and satisfied workforce.
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