Hiring your first employee in the UAE: contracts, WPS and the basics

The short version

Your first hire is also your first compliance relationship with the Ministry of Human Resources and Emiratisation (MOHRE). Three things have to be right from day one: a written contract with lawful terms, registration with the Wage Protection System (WPS) before the first payday, and salaries actually paid through it, on time, every month.

The contract: what the law actually requires

Under current UAE labour law, as summarised by Gulf News's explainer of employment contract clauses, an employment contract needs clear terms on at least:

• Probation period: can last up to six months, and cannot legally exceed that. Many employers set a shorter three-to-six-month period.
• Notice period: the statutory range for ending a standard contract is 30 to 90 days. During probation specifically, the article describes a 14-day written notice when the employer ends the contract or when the employee resigns to leave the UAE, rising to one month's notice if the employee is leaving to join another UAE employer.
• End-of-service gratuity: calculated on the employee's last basic salary only (not allowances or bonuses). The employee earns 21 days of basic pay for each of the first five completed years of service, and 30 days of basic pay for each additional year after that, with the total capped at two years' total wages.

General consumer information only, not legal advice. Rules and regulations can change, so check the latest official guidance for your circumstances.

Registering for the Wage Protection System

Once you are registered with MOHRE as an employer, you must subscribe to the Wage Protection System (WPS) and pay wages through it on the due dates, according to the UAE Government Portal's own page on how salaries should be paid. Under WPS, salaries are transferred into employees' accounts through a bank, exchange house or other financial institution authorised by the Central Bank of the UAE. Pay is normally in UAE dirhams, though a different currency can be agreed in the employment contract itself.

The same government page states that MOHRE will not process transactions for, or deal with the owners of, a company that is not registered with WPS, until it registers. In practice, this means WPS registration is not optional paperwork done "eventually": unregistered companies are blocked from routine MOHRE services from the outset.

What this guide does not cover

This guide describes mainland hiring through MOHRE. If you employ staff through a free zone company, your free zone authority, not MOHRE directly, may set its own employment and wage-payment rules. Check your specific free zone's own requirements rather than assuming this guide's MOHRE-based rules apply unchanged.

The practical takeaway

Before you extend an offer, have the contract terms (probation, notice, gratuity basis) settled in writing, and have your WPS registration in place before the first payday, not after. The cost of getting WPS wrong is not just a fine: it is being locked out of the MOHRE services you need to hire your next employee too.