The moment a company hires an employee, it acquires the duty of work tasks, costs and commitments related to having said worker on its staff. Not all companies want to have that responsibility for managing a team of employees, and for that reason they hire an employer of record Dubai.
Employer of Record (EOR) in the UAE is responsible for the following: Ensuring that the worker’s employment complies with the legal framework of the nation. Effectively overseeing the local payroll procedure. managing the submission of the required documentation and taxes pertaining to employment.
With the help of an employer of record, also referred to as an international PEO, you may hire and onboard employees in the United Arab Emirates rapidly—often in as little as two weeks—without having to bear the expense and risk of forming a local business.
Connect Resources is a duly registered Employer of Record under the Laws of the United Arab Emirates.
Connect Resources has the approval and license from MOHRE (Ministry of Labor) to operate as EOR-PEO in Dubai, United Arab Emirates (UAE).
Kindly note, Free Zone companies and Mainland companies without MOHRE approval cannot conduct this business in the United Arab Emirates legally.
We recommend you to verify your partner information to be sure they have all the licenses to operate.
Defining Employer of Record :
An employer of record (EOR) is a third-party company that functions as an employer in Dubai, UAE for labor-tax-immigration purposes while your employee conducts work activities at a different company.
Contact our Employer of Record Consultants in UAE
UAE Employer of Record, also known as an international PEO, allows you to hire and onboard workers in the UAE quickly, often in as little as two weeks, without incurring the risk and cost of establishing a local entity.
The employer of record or International PEO is committed to the common tasks and duties of the job, including all functions of the staff. Next, we’ll talk about what are some of the services that the employer of record UAE provides in Dubai.
The employer of record or International PEO is committed to the common tasks and duties of the job, including all functions of the staff. Next, we’ll talk about some of the employer of record services in UAE.
An employer of record keeps track of a local Emirati business that was formally hired by you. In this manner, you can increase recruiting more quickly without violating any nebulous employment laws.
There’s the international PEO that has become an alternative for employers of record, and makes it possible for companies to hire personnel anywhere on the planet more quickly, and without the intervention of a legal body.
When a person works for you, an Employer of Record Dubai keeps track of a local Emirati business that was formally hired by you. In this manner, you can increase recruiting more quickly while violating any nebulous employment laws.
Embracing the power of international Professional Employer Organizations (PEOs) has transformed the hiring landscape. Now, companies can efficiently onboard personnel across the globe, free from the usual legal hurdles. Experience swift, hassle-free global recruitment for your business with employer of record Dubai services.
The employer of record UAE, Dubai hires staff and becomes your legal Dubai employer of record. Only, the company will maintain control of the daily activities of the workforce.
As your Employer of Record Dubai manages legal employment responsibilities on your behalf, It’s important to choose a partner with the capability to provide a positive and supportive experience for your employees. Though the company will only maintain control of the daily activities of the workforce.
The company will be able to focus on the efficiency and management of the organization, while the employer of record takes care of payroll, benefits, risk reduction and regularly supports workers.
One of the best places to start a business is the UAE, thanks to its incentives and overall benefits. As a result, many companies are now looking to establish themselves in this great area. However, there are different laws regarding company formation, one of these is hiring local employees. To do so successfully and deal with other complexities of business setup, most investors decide to hire Employer of Record UAE services.
In this article, we will be giving you all the details and tips to make the most out of your Employer of Record’s hiring services. An Employer of Record is the ideal partner if you are seeking to expand to a new region. For instance, when opening a business in the UAE with an EOR, investors can forget about the hassles of dealing with several HR processes. This is due to the Employer of Record serving as a local employer, allowing them to take the responsibilities of hiring, managing employees, onboarding, payroll, and so much more. Let us guide you through this topic.
Six steps to hiring employees in the United Arab Emirates using an employer of record
Hiring in the UAE can be a very difficult process for business owners, as they have to follow different laws and regulations to keep their compliance. This is why having an Employer of Record by your side can be very beneficial. The process of hiring employees with EOR services is very easy, especially if you have a strong EOR by your side. To select the perfect Employer of Record you need to follow certain steps to obtain successful results and end up with a great companion for your HR needs:
Step 1: Weigh the pros and cons of each prospective partner.
You can obtain the vital HR infrastructure to find the ideal candidates in the UAE with an Employer of Record. Choose the EOR that includes the following activities for your international business needs:
- Employee benefits management
- Payroll processing.
- Onboarding
- Access to legal experts
- Intellectual property protection
- Data security
Step 2: Select the best EOR service provider by taking your time.
Employers of Record usually use third-party elements to provide services in different regions. The outcome of this approach is that their pricings can raise and it is not a guarantee that their solutions will be any good.
So, it is better if you make sure to select an Employer of Record that owns a local entity in the region, in this case the UAE. In this way, you can ensure that you are obtaining top-notch security and customer services.
Step 3: Check the coverage, endorsements, and reviews of the providers on your shortlist.
You can weigh the reviews of existing and past customers so you can understand the Employer of Record’s quality. There are several websites that you can use to read these reviews, so do not just the ones on their page. Go above and beyond to make sure that the EOR that you are looking to hire provides five-star services.
Step 4: Make certain that the UAE EOR solution will offer the best feasible employee experience.
Do not forget that the Employer of Record that you will hire will serve as the face of your business in the UAE. So, you have to guarantee that this EOR solution has the ability to offer a professional experience for your future employees.
A strong employee experience includes:
- Timely payments
- Customer service
- Details regarding deductions and more
Step 5: Collaborate with your partner to guarantee that the pay package you provide is always equal.
Collaborating with your Employer of Record partner, can guarantee that you have an appropriate compensation strategy. In this way, you can provide competitive salaries for your remote employees, this according to their skill level, experience, and cost of living.
An EOR can help you provide strong benefits packages according to the guidelines and regulations. Consequently, allowing you to attract better candidates. The Employer of Record you choose needs to have the necessary expertise to provide a wide range of benefits.
Step 6: Verify that your partner will protect your company’s data security and intellectual property.
Before hiring your Employer of Record, you need to verify that the one you choose has the infrastructure to protect the intellectual property and data security of your business.
EOR contracts need to have clear invention rights, making sure that your company retains them. Also, the EOR provider must have certifications in place, including GDPR and SOC 2. This to make sure that they will secure your data.
Benefits of using an employer of record in the United Arab Emirates?
Using an Employer of Record is a great idea if you want to establish a business in a foreign area. The support of an EOR can become essential if you are looking to compliantly develop your company. Their expertise can take your business to a whole new level and bring you the success you are currently looking for.
- With EOR services, you can follow Emiratisation laws.
- Onboard easily your new employees thanks to your new partner.
- Provide timely payment to each and every one of your new employees.
- Enhance your HR processes and manage your workforce.
- Create a strong benefits package and provide the appropriate compensation.
- Let the Employer of Record help you navigate visa processes.
- Compliantly obtain your licenses and permits for your business.
Employment contracts in the United Arab Emirates
Crafting an employment contract is an essential part of being an employer in the UAE. So, even if you have an Employer of Record by your side, you must make sure to understand every part of it. From working hours to compensation to probationary period to severance, here are the most important parts of it.
You must follow and understand the particular guidelines and rules of hiring employees in the UAE. Grasping the scope of employment contracts is essential, so here are some insights regarding some of the most essential parts of crafting a strong agreement for your employees. Let us observe now:
Working Hours
It is important to note that, in the UAE, a working day should not go over 8 hours, 48 hours over a six-day week. According to the law, the workday of:
- Commercial establishments
- Hotels
- Cafeterias
- Security services and more
Can go over nine hours.
Likewise, employers must have in mind that during Ramadan, the workday reduces by 2 hours every day. In the same way, employees should not go over five consecutive hours of work without no breaks for prayer, meals, and rest.
Employees working on a day off has the right to an extra day off or extra pay. Also, employees working on a holiday in the UAE or during their yearly leave, have to receive substitute days and overtime payment.
Even though the local UAE government establishes that the workweek is five days with free Fridays and Saturdays, private companies can establish their own workweeks.
Usually is usually a free day in the UAE, however, this does not cover employees who receive daily payments. Additionally, employees cannot provide services more than 2 consecutive Fridays.
Compensation
The UAE has a strong Labour Law that covers compensation and wages. Providing payments is responsibility of the employer, or the Employer of Record in this case. So, this particular point must be clear in the employment contract.
Private sector companies have to provide payment to their workforce through the Wages Protection System. It is important to note that, if an employer fails to do so, they will incur in penalties and fines.
This system is in charge of regulating salaries and overall compensations. The WPS transfers the salaries to every employee account or to the banking institutions that have the certification of the Central Bank of the UAE.
Salary payments have to be in:
- Emirati Dirhams
- Other currencies that both parties agree on their employment agreements
Workers need to know that they must specify the payment periods in the contract. These can be:
- Monthly
- Bi-monthly
- Weekly
Employers need to know that:
- There is no minimum wage according to the labor law
- Overtime payment must go for work between 9 pm and 4 am. Also, overtime work can only happen for two hours a day
Bonuses
In the labor law there are no guidelines regarding bonuses, which means that they are not mandatory for employees in any industry. However, it is common for employers to provide them at the very end of each year.
Even if an employer specifies that there will be any kind of bonus, it does not mean that they are a guarantee. In the end, the entitlement to obtain a bonus is a matter of if they are non-discretionary or discretionary.
Discretionary bonuses are specifically those ones where employers have the chance to decide how much they will be and if they should go out or not. The right to discretionary bonuses is not specific in any contract. These types of bonuses are at the discretion of the employer. Also, they are subject to the performance of the employee.
Non-discretionary bonuses, on the other hand, are those that are guaranteed by the employer. Usually, to provide these types of bonuses, there are certain requisites. For example:
- The length of the service
Probationary period
The UAE probationary period is an ideal chance for employees and employers to find out if they are a good fit for a positon.
In the region, the probation period usually is 3 months; however, it can easily extend to 6 months, but it cannot exceed that period of time. Likewise, employees can be under probation only one time for the same company.
It is essential to note that, when they are under the probation period, employees or employers cannot start a termination of contract. According to the labor law, if one of the parties initiates the termination of the employment agreement, they must provide a minimum period of notice.
Also, if an employee chooses to leave the country, they must provide a two week notice period. On the other hand, if they are choosing to move to a new employment in the region, they need to provide a thirty-day notice period.
To protect both parties, it is essential that they make sure that there is a strong employment contract in place.
Termination and severance
According to the laws, employers can terminate workers at any time if they provide a thirty-day notice in paper. It is vital to know that, the termination notice cannot go if the employee is on their annual leave or during sick leave. Employers can only terminate an employee with no notice or any compensation under a valid reason.
The requirements for employee severance can change according to:
- The length of the contract
- The party that ends the contract
- Reason for contract termination
- The worker’s amount years of service
Usually, the employer will provide compensation to their employee, unless the termination is valid.
With an Employer of Record, company owners can easily deal with any unforeseen event during worker termination. This, by offering their expertise and legal guidance, ensuring that employers stay out of the court of labor.
The EOR will make sure that employers can understand the laws and regulations around employment in the UAE. So, as an employer, you can forget about any fees or penalties.
What are the potential consequences of misclassifying employees in the United Arab Emirates?
Misclassifying employees in the UAE is a very serious issue that companies must evade. Some employers may think that misclassifying workers is a great way to avoid offering certain benefits. However, this approach can carry penalties, legal sanctions, or fines to pay any particular benefits that the employer has not been providing up until that point.
The Emirati labor law does not specify that there are any fees for employee misclassification. Nevertheless, it is essential to note that the law is changing continuously. So, always guarantee that your contractor and employees fall into the correct classification. In this way, you will avoid any legal liability that may be in your way.
You need to know that, the best way to go over any misclassification mistakes is to partner with a strong Employer of Record. Thanks to their knowledge and experience, they can easily classify your employees in the UAE. Therefore, you will not have to worry about incurring in penalties or fines.
Benefits for employees and paid time off in the United Arab Emirates
Providing employee benefits to your workforce is truly important when hiring in the area. According to the local labor law, as a business owner, you must provide certain mandatory benefits. Here are some of the most important, so you can understand them and abide by them as the worker law requires:
Maternity leave
The maternity leave is one of the most crucial mandatory benefits for employees in the region. Pregnant female employees obtain at least 45 days of maternal leave, this including the free time before and after the child’s birth.
Likewise, workers who have been continuously working for at least one entire year, receive complete pay. Workers who have been working less than a full year obtain half pay, on the other hand.
After the maternal leave is over, employees can receive over 100 days of leave without any pay I their absence is due to illness-relating pregnancy problems. To obtain this particular part of the leave, workers must provide a medical certificate.
During the first year after the child’s delivery, workers can obtain 2 extra breaks a day to take care of their newborn. Employers must provide payment for these particular breaks.
Vacation
The vacation time is the moment when employees receive their annual leave according to the local laws and guidelines. During this time, workers can travel to different areas, rest at home, visit friends or family, or something else. The objective of the yearly leave is to break away from your work responsibilities and take a time for yourself.
Staff members that have been working for over six months continuously, but less than a whole year can receive two days of annual leave for every month they have been working. On the other hand, if the employee has been working continuously for a whole year or even more, have the right to an entire month of yearly leave.
Employees can divide their annual leave in two periods and if they do not use it, it can carry over to a next year.
Holidays
The holiday breaks are different from the annual leave and other types of leave. It is important that employees receive payment during this particular leaves as it is mandatory by the law. Here are the regional holidays to be aware of during this particular year:
- New Year’s Day. It is an annual celebration for public and private companies.
- Eid Al Fitr. This is the first Eid holiday of the current year.
- Arafat Day. This is the holiest Day according to Islam and it occurs 70 days after Eid Al Fitr.
- Eid Al Adha. This particular holiday is in honor of Ibrahim’s sacrifice of his son, after God’s instructions.
- Hiriji or Islamic New Year. This is the start of a new lunar year.
- Prophet Muhammad’s Birthday. This holiday is to celebrate the Prophet’s birthday.
- Commemoration Day. This holiday is to commemorate the sacrifices of local martyrs in the military or humanitarian field.
- National Day. The National Day is to celebrate the whole region.
Sick leave
The sick leave benefit is very important for employees, as it allows them to recover from any illness in peace. Employers suffering from non-work-relating illnesses and injuries have to notify their employees within two days. Also, they have to undergo a doctor’s test for their verification and issuance of medical certificate.
Employees can resign during the time of their sick leave. However, they must meet some particular conditions. If they decide to resign, they must have the support from a doctor with a proper certification. When the employee resigns before using their mandatory leave days, they must receive their compensation.
Moreover, employees cannot receive termination during their sick leave unless employers provide evidence of absconding.
Health coverage
It is mandatory to provide medical health coverage in the area, however, this can depend on the location. In certain emirates, some companies must provide a strong health insurance package for every single one of their employees and pay for it.
Some companies even go so far to extend the health coverage plans to the family members of their employees. Nonetheless, this is not mandatory in every single one of the emirates, but only in some of them.
When you hire an Employer of Record, you can forget about the hassle of having to look for an insurer by yourself. With this type of partner, you can receive the benefits of providing employee health coverage without having to pay too much.
Pensions
When employing locals, it is important to provide retirement benefits and pensions. Local nationals have a right to these two benefits after they reach 50 with more than twenty years of employment. The government, employers, and employees are the ones in charge of contributing to the fund. Let us observe:
- Workers have to provide a 5% of their salary every month.
- Companies have to provide 15% of the salary every month for every employee.
When coming from the Gulf Cooperation Council, workers providing their services in the region have to receive their pensions according to the laws of:
- Saudi Arabia
- Kuwait
- Qatar
- Oman
- Bahrain
International individuals working in the region do not have a right to the pension, however they have to receive gratuity or severance payments.
Workers’ compensation
It is essential to provide workers’ compensation in case of any injury or illness. So, in the case there is a work-relating illness or injury, employers have to apply for a report with the local police and the ministry. Consequently, they have to cover the medical treatment until the worker recovers.
Also, if the illness or injury stops the worker from providing services, the company must provide full pay for six months or the period of convalescence. If this period goes on for longer than the initial six months, the company has to cover half the worker’s payments for over six months or until the worker:
- Recovers
- Is disabled
- Or dies
What characteristics does the employer of record UAE have?
- Employer of Record Dubai simply makes it possible to outsource workers internationally and regularly manage the human resource department in more than 185 countries.
- You can enter the market 90% faster and start working in just 48 hours.
- You’ll be more compliant to see that the work personnel function compatible and the labor laws are updated.
- There will be flexibility in new markets thanks to the alternatives provided that don’t require long-term responsibilities.
What does the employer of record need to know to hire in UAE?
Labor standards in the UAE are complex and confusing looking at it externally, although it does have some overlap with other countries. UAE citizens and foreign employees are under the country’s labor laws with certain exceptions for some categories, so it’s suggested to acquire professional services when recruiting staff in UAE.
Contact our UAE Employer of Record Consultants
What are the considerations to have when employing in the UAE?
Companies that have in mind to open a complete local office and a human resource department will be met with challenges that can be regulated by using a local payroll provider, and who’s knowledgeable of UAE laws and regulations for both local and foreign workers.
According to article 3 of Federal Law No. 8 of 1980 for labor relations, the Law applies to all workers living in the UAE, whether they are a citizen or an expatriate.
Who can be exempt from the Labor Relations Law?
Those employees who have been hired by the federal government and government departments of the UAE.
- Public, federal and local agencies and institutions, municipalities, and employees hired in local federal government projects.
- Members of the armed forces, police and security personnel.
- Domestic service employees. Employees dedicated to agriculture and livestock.
Someone associated with a business is not considered a worker, and therefore isn’t obligated to obtain an UAE job card. At the same time, a foreign associate will deal with the immigration office instead of the employment office.
However, if the associate has a position of worker in addition to the status of his partner, he’ll be considered as a worker due to the function he exercises within the organization.
If any worker works by commission, he will be considered an employee, even if he is associated with the organization for which he works.
The official entity that legislates all work activity in the UAE is the Ministry of Labor (MOHRE – Ministry of Human Resources and Emiratization)
What rights do workers of a employer of record in UAE have?
- Medical license; although you won’t have the right to any leave due to illness while you’re in the trial period.
- Those who have worked for at least a period of three months, after completing the trial period.
- Receive the salary in full in the first 15 days.
- Half the salary for the next 30 days.
- The period that follows will be unpaid.
- You can accumulate your annual vacation.
- For each year worked, someone who worked between 6 months and one year will be entitled to two days annual leave for each year worked.
- Workers will be paid their base salary plus the housing allowance, if applicable, and any other allowances they receive in their normal work month.
What do you need to know about maternity leave in the UAE?
Workers will be entitled to 45 days of paid maternity leave, even before and after childbirth, provided that she has worked for at least one year.
But if you worked less than a year, maternity leave will be given half the salary.
Upon expiration of maternity leave, the employee has the right to extend her leave for no more than 100 days without pay.
Contact our Dubai Employer of Record Consultants
What does the trial period imply?
In the UAE, new hires have to go through a probationary period. Depending on the company’s policies, the probationary period could last anywhere from three to six months. Once completed it’s considered as part of the term of global employment, and is taken into account when determining the tip and other benefits.
What GEO alternatives are there for the UAE?
Companies arriving in the UAE must decide to use their own resources, or use a global work organization, to manage payroll and employment duties.
A UAE employer of record alternative makes it quicker, easier and cheaper to mobilize workers without owning a stable payroll entity.
Companies arriving in the UAE must decide to use their own resources, or use a global work organization, to manage payroll and employment duties.
An employer of record Dubai alternative makes it quicker, easier and cheaper to mobilize workers without owning a stable payroll entity.
The DIY approach can be delayed until there’s a properly integrated company that is in a position to execute the payroll and thus include the cost of registered capital.
Connect Resources alternative is properly integrated in the UAE, and has a functional payroll designed to sponsor employment permits. This considerably reduces implementation times. That’s why Connect Resources is responsible for all job related compliance issues.
What is Connect Resources?
Provides a fully outsourced job service in UAE. Companies growing there can hire Connect Resources to employ and pay their personal staff on their behalf.
Connect Resources makes the legal commitment of these workers, becoming the registry employee, supporting them with work permits, complying with the local labor law and executing their payroll every month.
How to use Connect Resources as employer of record in the UAE?
Companies may say use their resources or a global employment organization to manage job and payroll duties.
A GEO alternative is a benefit when the company wants to organize an office quickly at a comfortable price.
On the other hand, the complexity of the labor regulations in the UAE causes the use of a GEO to be recommended to ensure compliance with the labor regulations, including the drafting of contracts for employees’ work premises.
The growing UAE company has contracts with GEO to hire and pay its employees on their behalf. Subsequently, the GEO has the legal responsibility of these workers, supporting them with work permits if required, respecting labor laws and executing the payroll monthly.
Above all, it is useful for meeting specific retention requirements for pensions and benefits, and also for recording completion, trial periods, and managing licenses.
What Does an Dubai, UAE Employer of Record Includes in Payrolls
- Includes the cost of registration management for the employer and monthly payroll prices.
- Doesn’t include payroll or income taxes.
- Employers ‘and workers’ social security is only applied to local workers.
- The current currency is the Emirate Dirham (AED).
- No social security of employers or workers for foreigners in UAE.
- Doesn’t require tax returns.
- Corporate tax requirements aren’t applicable.
- Social security employer and legal contribution is not available to foreigners.
- 12.5% pension contribution for local employees
- Provides $ 5 of the pension contributions of local employees.
What are the insurance requirements?
o Private medical insurance is recommended.
o You can provide private medical care.
o It’s possible to guarantee private health insurance.
o Attend to provide bank accounts.
What do you need to know about the work permit?
- It’s possible to sponsor the work permit. Connect Resources also sponsors foreign employees with work visas that allow them to work in the UAE.
- As a registered employer, Connect Resources manages all procedures and employment requirements.
- The clientele continues with the commitment to the daily management of its workers.
- The work permit can be processed between 2-4 weeks, all depending on the origin of the employee.
How’s the work permit processed?
Contact our Employer of Record Dubai Consultants
Connect Resources must show a request for quota approval. When approved, the job entry visa is applied for through the UAE immigration authorities.
Then the employee can enter the UAE, so that Connect Resources manages the required medical and biomedical tests. A day later, the medical evaluation will be ready with its stamp on the workers’ passport. It’s at this time that the workers have permission to work in the country.
To request the Emirati ID card, you must spend 2-4 weeks waiting and then it will be issued.
The required documents are: Title, Diploma, professional certificate, copy of the personal page of the passport and a photo of it.
Is it possible to process the work permit in the country?
Everything will depend on nationality, so it’s recommended that the process be completed long before entering the UAE.
Can the business visa be changed to the work permit?
The answer is no. However, some people of certain nationalities can change from a Visa to a work permit without leaving the UAE.
Is it possible for the spouse to work with a dependent visa?
The spouse doesn’t need to have a work authorization, but with a spouse visa you can change to a work permit without having to leave the UAE.
What’s required to know about the business visa?
- It’s possible to obtain it.
- The price is a minimum $ 1,000.
- It takes between 5-10 days to process depending on nationality and whether the employee has a degree attested or not..
How does the payroll and taxes work in the UAE?
There are very clear rules for payroll and taxes in the UAE that will depend on whether your company hires nationals or foreigners. In general, they have few corporate tax problems since there are no individual income taxes for personnel, nor social security for those who left the country, nor payroll taxes, nor legal pension contributions, nor withholdings.
What is a remote payroll?
This is when a foreign, non-resident company pays wages to employees residing in the UAE. To do this, they use a GEO service that will focus and pay the worker on their behalf.
How are payrolls administered locally by the employer of record UAE, Dubai?
Sometimes companies are registered in the UAE, but they prefer to have their payroll handled by another company and a payroll provider can do this. But the company that functions as a professional employer organization still has full responsibility for complying with employment, immigration, tax and payroll regulations. As for what has to do with payments, payroll calculations can be subcontracted by the payroll outsourcing provider.
In conclusion, the services that a employer of record in Dubai can provide are truly multiple. This outsourcing can facilitate and optimize the workforce performance within any company. The pros and cons involved in decision making are worth considering to determine if outsourcing is the best alternative for the employing organization.
