Key Laws and Employment Requirements in the Middle East

In our continuing series to highlight employment laws and labor requirements around the globe, we’d like to introduce you to the Middle Eastern region of the world. Known for its rich history and natural resources, this region is also a source of talent that many employers would love to access. This analysis will focus on three countries in this area: the United Arab Emirates, Saudi Arabia, and Egypt.

 

For a look at other areas of the world, be sure to check out:

 

United Arab Emirates

The United Arab Emirates, or UAE, is located in the Arabian peninsula. It is one of six member countries of the Gulf Cooperation Council, a political and economic alliance among the member countries. While Dubai is the largest city in the UAE, Abu Dhabi is the capital of the country. Additionally, while Arabic is the official language, English is very common since approximately 88% of the country’s residents are expatriates.

 

Employment in the region is governed by laws set forth by the Ministry of Labor. Some key requirements:

 

  • Employment contracts are required. They can be limited or unlimited contracts depending on the project duration and expectations.
  • Notice periods: employers must provide 30 days’ notice or compensate the employee in lieu of notice.
  • Pensions: employers must contribute 15% to an employee’s pension fund and employees must contribute 5%. The government provides 6% of the funds.

 

One other unique element about the UAE is “emiratization,” or the incentive to hire local UAE citizens for projects. This is somewhat similar to Saudization (below), but this is positioned as a benefit to employers that are able to create sustainable positions for UAE nationals.

 

For additional information, please visit the CountryPedia page for UAE.

 

Saudi Arabia

Saudi Arabia is in the middle of a revolutionary plan to drive economic growth in the country. Vision 2030, which hopes to create 450,000 jobs in the region, is a big leap but may create new opportunities for employers. Because a third of Saudi Arabia’s population of 27.3 million are immigrants from other countries, changes in Saudi labor laws affect a wide range of individuals.

 

As noted above, the private sector must follow Saudization rules by employing a minimum percentage of nationals in all private companies (Nitaqat).

 

Employment in the region is governed by laws set forth in the Labor and Workmen’s Law. Some key requirements:

  • Employment contracts may be fixed-term or indefinite. Employers should be aware that continuing to renew fixed-term contracts may convert them into indefinite contracts over time in the eyes of the law. Probation periods may last up to 180 days.
  • Notice periods: employers are required to provide no less than 60 days’ notice and a valid reason for any terminations.
  • Pensions: employers must contribute 9% and employees are responsible for 9% of gross earnings according to gov.

 

Egypt

Egypt has a working population of approximately 30 million individuals. The country has partnered with the U.S. to focus on workforce capability development and training initiatives, each designed to increase sustainable prosperity within the nation. These types of training, combined with the country’s relatively high unemployment rate, mean that there is a potentially qualified labor force ready and willing to work.

 

Employment in the region is governed by laws set forth by the Labour Law. Some key requirements:

  • Employment contracts may include probation periods, but the length may not exceed three months. In addition, there are three types of contracts typically used: fixed-term, open-ended (indefinite), and contract for performance of specific project-based tasks. If a fixed-term contract expires but both parties continue to perform, it is understood that the contract was automatically renewed for an indefinite period.
  • Notice periods: the notice period varies depending on length of service. This ranges from two months’ notice for less than ten years of service to a maximum of three months’ notice for more than ten years of service.
  • Pensions: the system changed in recent years; now employers must contribute 10% and employees are responsible for 16.5%, but employees can voluntarily contribute additional funds if desired.

 

Each of these and other Arab countries are not only economic powerhouses due to a rich variety of natural resources. They also have highly qualified and educated citizens that are available to perform work on a project-based or ongoing basis. For more information about these and other countries, be sure to check out the CountryPedia.