Therefore, as the holy month of Ramadan approaches, it is essential for employers in the UAE to understand the changes in working hours and compliance requirements under UAE employment law.
Reduced working hours during Ramadan
Private-sector employees are entitled to a reduction of two working hours per day throughout Ramadan. This change applies to all employees, regardless of their religion or whether they are fasting.
For employees working a six-day workweek, the total weekly working hours should not exceed 36 hours. For employees working a five-day workweek, the total weekly working hours should not exceed 30 hours.
Overtime regulations during Ramadan
Employees required to work beyond the reduced Ramadan hours are eligible for overtime pay. Employers must ensure compliance with overtime compensation laws, taking into account that overtime is calculated after the reduced working hours during Ramadan (i.e. after the sixth working hour), instead of the usual eighth hour.
Eligibility for overtime
Most employees in the UAE are entitled to overtime pay, but certain categories are exempt, including:
- Board members
- Supervisors who have similar authority to an employer
- Employees performing technical work in shifts
- Employees engaged in preparatory or complementary work that must be done outside of regular hours
Overtime compensation
For employees eligible for overtime, any work beyond the regular hours qualifies as overtime. Compensation is as follows:
- For the first two hours of overtime during their standard workweek, employees must be paid at 125% of their regular hourly wage.
- If an employee works on a scheduled weekend (as defined in their contract), they are entitled to either:
- An additional day off, or
- Payment for that day at their normal rate, plus at least 50% extra.
Special rules in Dubai International Financial Centre (DIFC) and Abu Dhabi Global Market (ADGM)
The DIFC and ADGM have separate employment regulations. In the DIFC, reduced Ramadan working hours apply exclusively to Muslim employees, whereas in the ADGM, reduced working hours during Ramadan only apply to Muslim employees who observe the fast. However, employees who are fasting may voluntarily choose to work beyond the reduced hours.
Consequences of non-compliance
Employers who fail to adhere to Ramadan working hour regulations may face fines under the UAE Labour Law. Fines for non-compliance are of up to AED 1 million (USD 272,255), depending on the severity and number of employees affected.
Employees who experience discrimination or unfair treatment based on religion may file a labour claim with the Ministry of Human Resources & Emiratisation (MOHRE) or the relevant free zone authority. If the claim remains unresolved, it may then be transferred to the labour court.
In respect of overtime, employers should also be aware of the additional risks associated with failing to adhere to overtime regulations including:
- Court claims: Employees may file claims for unpaid overtime, and the burden of proof lies with the employee. If successful, the claim is limited to overtime worked in the previous 12 months.
- Free zone authority inspections: Free zone authorities may review time records and investigate overtime practices, although they typically adopt a pragmatic approach for white-collar workers. If violations are found, the authorities may mandate back-pay, which is also limited to overtime worked in the previous 12 months.
In the DIFC and ADGM, anti-discrimination laws protect employees from unfair treatment based on religion. Employers who require Muslim employees to work beyond the permitted Ramadan hours could face labour claims, with compensation reaching up to three years’ basic wages in the ADGM or up to two years’ wages in the DIFC in discrimination cases.
What does this mean for employers and what should they do now?
Employers should take proactive steps to accommodate employees observing Ramadan, including flexible work arrangements and ensuring compliance with UAE laws. Please get in touch with a member of the MDR ONE team if you require any support.
