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IMPACT – MEDIUM
What is the change? Several new labor laws affecting the employment and work authorization of foreign nationals in the United Arab Emirates will go into effect Jan. 1, 2016.
What does the change mean? The three new decrees cover employment offer letters, conditions allowing for the termination of foreign employees, and the criteria that are required before a new employer may obtain a work permit for an employee whose employment ended with a previous employer.
Ministerial Decrees 764, 765 and 766 were approved in September and are due to take effect Jan. 1. They are summarized as follows:
Offer letter. Under Decree 764, employers must issue to foreign employees an employment offer letter that conforms to the Ministry of Labour’s approved standard employment contract. The terms of the employment contract cannot be changed to more restrictive terms than those in the offer letter. The letter must be signed by the foreign national and lodged with the ministry before an entry visa or work permit is issued.
Termination of employment. Decree 765 redefines the conditions for termination of employment. Fixed-term contracts have a maximum duration of two years and can be terminated upon expiration, upon mutual agreement, or unilaterally if the employer or employee gives written notice at least one month (but not more than three months) in advance. Unlimited contracts may be terminated for cause, by mutual agreement, or upon notice by one of the parties at least one month (but no more than three months) in advance.
New work permits. Decree 766 removes the current requirement that employees stay at least one year with an employer and allows a new employer to apply for a work permit for the employee under the following conditions:
BAL Analysis: Employers should review their policies in accordance with the new labor rules and anticipate that foreign employees will have greater flexibility to change jobs.
This alert has been provided by the BAL Global Practice group and our network provider located in the United Arab Emirates. For additional information, please contact your BAL attorney.
Copyright © 2016 Berry Appleman & Leiden LLP. All rights reserved. Reprinting or digital redistribution to the public is permitted only with the express written permission of Berry Appleman & Leiden LLP. For inquiries please contact copyright@bal.com.
IMPACT – LOW
What is the change? Foreigners who hold a resident permit in a Gulf Cooperation Council country are now required to apply online for a visa before entering the United Arab Emirates.
What does the change mean? Foreign residents of GCC countries who fail to apply for an e-visa before travel to the UAE risk being turned away at the border. Visas on arrival are no longer available for these travelers.
Background: In May, GCC countries, including the UAE, began requiring visas for foreign residents traveling within the GCC. In August, the UAE provided an online visa option for these travelers instead of consular processing; the transition to e-visas is complete and they are now mandatory without exception.
The e-visa application must be lodged online, and the e-visa is issued by email. It must be used within 60 days and is valid for a single entry of 30 days (extendable for an additional 30 days). If the applicant’s profession has changed after the issuance of the e-visa, he or she will not be allowed to enter the UAE. In addition, the applicant’s GCC resident permit must be valid at least three months beyond the intended arrival date and their passport must be valid for at least six months beyond arrival date.
While family members of an expatriate resident of a GCC country may obtain a 60-day visa, they will only be issued the visa if they are traveling with the GCC resident.
BAL Analysis: Expatriate employees holding a resident permit in a GCC country and traveling to the UAE can no longer rely on visas on arrival and must apply online for their entry visas.
What is the change? Government offices in the United Arab Emirates will close for national holidays Dec. 1-5, reopening Sunday, Dec. 6.
What does the change mean? Government offices will be closed for the full five days and private offices will be closed Dec. 2-3.
Background: The UAE observes a Sunday-to-Thursday work week. Martyrs’ Day, memorializing the country’s veterans, will be observed Dec. 1, followed by the Dec. 2-3 observation of National Day, which commemorates independence from Britain and formation of the federation Dec. 2, 1971.
BAL Analysis: Employers should plan ahead for the holiday break and submit time-sensitive filings in the next few weeks and preferably well before the end of the month.
What is the change? The United Arab Emirates is issuing longer-duration visas-on-arrival to nationals of most European Union member countries.
What does the change mean? EU nationals, with the exception of Irish and U.K. citizens, may apply for 90-day visas-on-arrival initially, instead of having to renew 30-day visas.
Background: The new visas follow an agreement on visa-free travel signed in May by the UAE and the EU. Ireland and the U.K. were not part of the agreement.
BAL Analysis: Extended visas-on-arrival will benefit most EU nationals, but are not available to all visa-exempt nationals. U.S. nationals, for example, are still limited to 30-day visas-on-arrival that may be extended for another 30 days.
What is the change? The Dubai International Financial Centre has introduced an online application system for residency visas, renewals, work permits and visit visa applications.
What does the change mean? DIFC is the last free zone to introduce an online application system. Other free zones and the Ministry of Labor already require electronic filing of residency visas, renewals, work permits or visit visas.
Background: Dubai moved to an online application system last year, and the independently governed free zones eventually introduced online application systems as well. DIFC recently became the last free zone to launch an online portal, making online applications for residency visas, renewals, work permits and visit visas the only option throughout Dubai.
Individuals applying for visas for dependents still have the option of submitting applications manually. And while the application process has moved online, visa and permit issuance remains manual. Dubai’s free zones temporarily experimented with electronic visa issuance last year, but abandoned the effort after running into problems coordinating with the Dubai airport.
BAL Analysis: Electronic application processes generally make it easier to submit applications and supporting documentation.
What is the change? Dubai will soon enter the second phase of its program to require employers to provide health insurance to all employees, including foreign nationals.
What does the change mean? Beginning July 31, companies employing 100 to 999 employees will be required to offer health insurance to all employees. Companies that do not provide health insurance will be unable to sponsor foreign employees applying for visas or renewals.
Background: Dubai adopted a universal healthcare law in 2013. The Dubai Health Authority is working with the General Directorate of Residency and Foreigners Affairs to ensure that companies that fail to meet their obligations under the law will be ineligible to sponsor employees for visas or visa renewals. Some free zones, including the Dubai Multi Commodities Centre (DMCC), already enforce universal healthcare requirements for all companies, regardless of size.
Elsewhere, however, the requirement is being implemented in phases. The first phases of the law, covering companies with 1,000 or more employees, took effect last year. As of July 31, the rules will cover companies employing 100 or more employees. Companies with fewer than 100 employees have until June 2016 to provide health insurance.
BAL Analysis: Companies covered by the second phase of Dubai’s universal healthcare law must provide health insurance to all employees, including foreign employees, by July 31 or risk significant difficulties in the visa process.
What is the change? Certain expatriates holding residence permits issued by Gulf Cooperation Council countries are subject to a new rule requiring them to obtain visas before travel to the UAE rather than upon arrival.
What does the change mean? The rule covers expatriates with residence permits issued by Bahrain, Kuwait, Oman or Qatar. UAE authorities carved out an exception for managers, engineers and doctors, but they nevertheless may want to apply for a visa ahead of time to avoid confusion or unnecessary delay.
Background: The change will make travel to the UAE slightly more difficult for some GCC country residents. Immigration authorities have said the new rule will not apply to expatriates whose job title on their residency permit is manager, doctor or engineer, so long as they have had their GCC residency for at least six months.
Those who are affected by the change must apply for tourist visas, family-sponsored visit visas or company-sponsored business visas. These visas are generally valid for 30 days and are not renewable; on-arrival visas are also valid for 30 days, but can be extended for an additional 30 days. Those in need of visas for longer periods of time should contact a BAL attorney about whether any options exist for longer stays in the UAE.
The change described above only applies to expatriates with GCC residence permits; GCC nationals are not affected.
BAL Analysis: While UAE immigration authorities have excepted managers, engineers and doctors from the new requirements, even GCC country residents who fit into one of those categories may want to consider obtaining a visa before travel in order to avoid confusion or delay.
What is the change? The European Union and the United Arab Emirates signed an agreement Wednesday that sets the stage for short-stay visa-free travel between most EU countries and the UAE.
What does the change mean? The agreement will allow visa-free travel for most EU nationals to the UAE and for UAE nationals to most EU countries for up to 90 days in a 180-day period. The U.K. and Ireland are not party to the deal.
Background: Under the terms, EU and UAE nationals with valid passports will be eligible for visa-free travel for tourism, culture, scientific activities, family visits and business. The agreement does not cover “paid activity.” All EU countries with the exception of the U.K. and Ireland are included in the agreement.
BAL Analysis: The agreement signed Wednesday has been more than a year in the making, and is intended to facilitate business travel between EU and UAE nationals.
What is the change? The United Arab Emirates is implementing a new “zero overstay policy” in an effort to crack down on visitors who overstay their visas.
What does the change mean? The new regulations call for fines on anyone who overstays their visa – even by an hour. They will be fined 200 Emirati dirham (about US$54) at the airport per day for a maximum of five days. If they stay beyond five days, they will be required to obtain an exit pass from immigration and pay the penalty at that time. An additional government immigration charge of AED 1,020 (about US$280) per day will be imposed on the sponsoring company, which must pay the fine within 24 hours. A company that fails to pay a fine could be barred from sponsoring future travelers to the UAE.
Background: The UAE government has revamped its visa schemes in recent months to ensure that foreign nationals fully comply with the country’s entry and exit policies. The UAE is taking a zero-tolerance stance toward visa overstays. A business visitor who needs to stay longer must exit, but they may reapply immediately.
In a related change, tourist visas can no longer be extended in-country. Those who do not exit after the permitted duration (30 days or 90 days) are subject to the new overstay fines. Like business visitors, they may reapply immediately without having to observe a 30-day exit period.
BAL Analysis: The steep penalties and no grace period indicate that UAE is stepping up enforcement of those who overstay their visas. All UAE-based companies sponsoring foreign employees and assignees should make sure foreign nationals leave before expiration of their visas and that any fines are promptly paid.
IMPACT – HIGH
What is the change? On Jan. 1, two Dubai free zones will implement a law that requires companies to cover all employees with basic health insurance, and it is expected that all immigration offices in Dubai mainland and all free zones will also adopt the rule in the near future.
What does the change mean? Employers in the Dubai mainland and free zones should be prepared for this new rule, as they will have to purchase and provide proof of employee health coverage before they can renew visas and licenses.
Background: Dubai passed a universal healthcare law one year ago. The law requires employers to provide all employees, including foreign workers, a minimum health insurance plan from an insurer authorized by the Dubai Health Authority. Dubai planned to roll out the programbeginning in 2014 with the largest employers and phasing in medium and smaller employers by 2016. However, implementation has been spotty and official dates have been difficult to ascertain.
So far, only the DMCC and DSO Free Zones have officially announced they will implement the employer-paid health insurance system on Jan. 1.
Dubai Immigration and all free zones are expected to follow shortly thereafter, although no official date has been set.
BAL Analysis: Companies in the DMCC and DSO Free Zones should make sure they are ready for the imminent change. Because the new system will impact nearly all visa applications and renewals for foreign workers and licenses and establishment cards for companies, employers in Dubai mainland and all other free zones should prepare as soon as possible for this requirement, which could take effect soon with little notice.