distribution of end-of-service gratuity

The UAE has introduced significant labor law reforms under Federal Decree No. 9 of 2024, effective from 2025. These reforms aim to enhance employee rights and workplace regulations, while maintaining the existing end-of-service gratuity calculation method to ensure financial security for workers. Under the updated labor law, employees are entitled to 21 days of basic salary for each year of service for the first five years, and 30 days for each additional year thereafter. They are also entitled to payment for any accrued but unused annual leave. These provisions apply to expatriate employees who have completed at least one year of service.

The 2025 reforms introduce several progressive changes to the UAE labor market, including flexible work models, extended parental leave, improved sick leave provisions, and anti-discrimination and anti-harassment measures. Employers are required to update their employment contracts and workplace policies to ensure compliance with these new regulations. The UAE Ministry of Human Resources and Emiratisation (MOHRE) emphasizes that these reforms aim to balance the needs of employers and employees, ensuring fairness, flexibility, and transparency in the workplace.