How Does the UAE Labour Law Address Annual Leave and Overtime Calculation?


How does the UAE labour law address annual leave and overtime calculation?


Understanding how overtime and annual leave are calculated is crucial for employers and employees. The UAE Labour Law provides clear guidelines on determining and compensating for overtime, as well as outlining provisions for annual leave. This article addresses the key considerations and provisions that govern both overtime and annual leave calculations in accordance with the UAE Labour Law.

  1. Overtime Working Hours: According to Article 19 of the Labour Law, an employer may engage a worker in overtime working hours, not exceeding two hours per day. Exceptions to this rule are subject to conditions and rules specified by the Implementing Regulation of the Decree-Law. Importantly, the total working hours, including regular and overtime, should not exceed 144 hours every three weeks.
  2. Compensation for Overtime: When working conditions require a worker to exceed normal working hours, the additional period is considered overtime as outlined in Article 19(2). For this, the worker is entitled to remuneration equal to the compensation for normal working hours, calculated based on the basic salary, plus an increase of at least 25% over that remuneration.
  3. Day of Rest and Public Holidays: Article 19(4) specifies that if circumstances require an employee to work on their designated day of rest, they should be compensated with another day of rest or receive remuneration for that day, including a 50% increase. The Labour Law emphasizes that a worker may not be employed for more than two consecutive days of rest, except for day labourers.
  4. Consecutive Days of Rest: Workers, excluding those employed on a daily basis, are not to be engaged for more than 2 consecutive days of rest.

Annual Leave: 

Article 29 of the Labour Law refers to annual leave entitlements for workers. Employees are entitled to 30 days of fully paid leave per year for continuous service or two days per month for a service period between six months and a year.Part-time workers’ leave is determined by actual hours worked. Employers may grant leave during the probation period, compensating for unused leave if probation is unsuccessful. Workers, with approval, may carry over leave to the next year. During annual leave, the employee is entitled to remuneration, and holidays within the leave period are included.The employer cannot prevent the worker from benefiting from accrued annual leave for more than two years unless the worker chooses to carry it forward or receive a cash payment. If a worker leaves before using the leave, they are entitled to remuneration, calculated based on the Basic Salary and specified in the Implementing Regulation. The regulation also outlines rules and conditions for leaving the organization and compensation.


Understanding the provisions outlined in Article 19 is essential for maintaining a fair and compliant work environment, ensuring that both employers and workers are aware of their rights and responsibilities.

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