The new ADGM Employment Regulations – what you need to know

The Abu Dhabi Global Market (ADGM) has published the Employment Regulations 2024, a comprehensive update aimed at advancing workplace standards, strengthening employer-employee relationships, and supporting the continued development of this leading financial hub.

Scheduled to take effect on 1 April 2025, the new Regulations introduce pivotal changes across various areas, including hiring practices, wage protection, working conditions, parental rights and employment termination procedures.

The requirements of the Regulations are minimum requirements and a provision in an agreement to waive or exclude any of those requirements, except where expressly permitted under the Regulations, will be void.

Designed to meet the evolving needs of businesses and employees, these changes signal ADGM’s commitment to maintaining its position as a globally competitive and compliant business environment.

Key changes in the new regulations

1. Application and scope
The Employment Regulations 2024 apply to all employers and employees based in the ADGM. However, employers holding dual licences issued by the Abu Dhabi Department of Economic Development (ADDED), whose employees fall under UAE federal labour law, are exempt.

2. New employment classifications

• Remote employees: Employees working outside the UAE are not required to obtain a UAE residence visa or ADGM work permit. Their rights and obligations differ slightly from those of on-site employees.
• Part-time employees: A new classification introduced to address the needs of employees working reduced hours. The regulations clarify entitlements for part-time employees, including leave, benefits, and other provisions, which are now explicitly pro-rated based on the number of hours worked.

3. Employment contracts
Employers are required to issue written employment contracts within one (1) month of an employee’s start date, ensuring compliance with the clear criteria set out in the regulations. Any amendments to these must be agreed upon in writing by both parties, except for minor administrative changes.

The probationary period is limited to six (6) months or half the contract length for fixed-term contracts of less than six months. Employees retain certain rights during probation, including leave approval and entitlement to a repatriation flight if their employment is terminated.

4. Working hours and leave

• Working hours: Limited to 48 hours per week unless the employee consents otherwise in writing. During Ramadan, Muslim employees are entitled to a 25% reduction in working hours without pay reduction.
• Leave policies:
  • Employees can roll over up to five (5) days of annual leave into the following year.
  • New provisions include five (5) days of paid bereavement leave and expanded maternity and paternity leave rights, such as nursing breaks and adoption-related leave.

5. Termination and ‘End of Service’ benefits

• Termination: Minimum notice periods apply, and employers are allowed to place employees on ‘gardening leave’ during the notice period. Employers must cancel visas promptly and must not make repatriation conditional on waiving employee rights.
• ‘End of Service’ Gratuity: Clarifications include removing the two-year (2) pay cap and allowing eligible employees to opt for a pension or savings scheme instead of gratuity payments.

6. Discrimination and employee obligations

• Protections: Pregnancy and maternity are now protected characteristics, with remedies for discrimination, harassment and victimisation. Employers found in violation face penalties, including compensation of up to three (3) years’ wages.
• Employee responsibilities: New obligations include complying with lawful employer instructions, avoiding bribery, serving employers faithfully, and maintaining confidentiality.

7. Employer responsibilities and vicarious liability

• Employers are required to:
  • Cancel visas and work permits promptly after employment termination.
  • Maintain detailed employment records.
  • Implement policies to ensure compliance with workplace safety, anti-harassment and equal opportunities standards.
• Vicarious liability: Employers may be held liable for unlawful acts by employees unless they can prove they took reasonable steps to prevent such behaviour.

Why the Employment Regulations 2024 matter for employers
The Employment Regulations 2024 introduce comprehensive updates to employment rules to which employers in the ADGM must adhere. Non-compliance can result in significant penalties, including fines and liabilities, with some violations carrying penalties of up to six (6) months’ wages. Beyond financial repercussions, breaches may lead to reputational damage, strained employee relations, as well as potential legal disputes.

Understanding and implementing these regulations is essential to maintaining smooth business operations in the ADGM. Employers must ensure that their policies, contracts and workplace practices align with the new rules to avoid unnecessary risks. This includes updating employment contracts, ensuring proper record-keeping and implementing anti-discrimination policies.

Proactively preparing for these changes not only helps businesses remain compliant but also strengthens employee trust and positions employers to operate confidently within the ADGM’s regulatory framework.

How can Sovereign PPG assist?
Sovereign PPG is a registered corporate service provider in ADGM and has a strong understanding of its regulatory requirements. Our team can assist with all aspects of compliance under the Employment Regulations 2024, from updating employment contracts to implementing workplace policies, ensuring that your business stays aligned with the new rules.

If you need support with navigating or implementing the ADGM employment regulations, contact our HR Consultant Faraz Ahmed on hrconsultingme@SovereignGroup.com.

Or if you require assistance with any other aspects of company set-up, restructuring, local partnership or PRO services across Abu Dhabi, Dubai, the wider UAE, Oman, Qatar or the KSA, please get in touch with us on +971 (0)2 448 5120 for Abu Dhabi, or email us at ad@SovereignGroup.com, or complete the contact form below. We’d be delighted to assist.