More benefits for fully remote employees under ADGM’s new employment law

People working remotely for companies in Abu Dhabi's financial zone will soon have the same rights as office-based staff. The legal change affects employees based outside the country and comes into effect from April 1. The move is a first for the UAE. It means remote employees will benefit from maternity leave, sick pay and end-of-service payments. There are two types of remote employees who the law covers. One is a domestic remote employee who lives in the UAE, is employed by an ADGM entity and either just works from home all the time or does a hybrid model. The second type of remote employee defined under the law never comes to the UAE, but is employed by an ADGM entity, said Luke Tapp, partner and head of Middle East employment practice at law firm Pinsent Masons. “The majority of the benefits under the law, such as annual leave, sick pay, maternity pay and end-of-service gratuity , will still apply to remote employees. They will have consistent treatment with a normal UAE-based employee,” said Mr Tapp. “However, remote employees based outside the UAE are not entitled to a visa and work permit, or to receive health insurance, under the law.” The ADGM-based employer is also required to provide remote employees with the technical equipment necessary for them to work, according to Mr Tapp. There's nothing in the law that says salaries for remote employees should be different at all, and employers probably would run the risk of discrimination claims if they were to do so, he said. Established in 2015, ADGM on Al Maryah Island has recorded rapid growth as Abu Dhabi enhances its non-oil economy and focuses on attracting more international companies and investors. The financial free zone has seen a rise in asset and fund managers, with assets under its management rising by 215 per cent annually in the third quarter of 2024. The total number of operational entities within ADGM’s jurisdiction increased to 2,251 during those three months − up 31 per cent annually. This reflects strong demand from sectors such as asset management, financial technology and professional services. Since the third quarter of 2023, there has been an influx of 4,433 workers, marking an increase of 35 per cent in the overall workforce within the ADGM jurisdiction. Under the new ADGM employment law, the concept of discrimination has been extended to include pregnancy and maternity as protected characteristics, said Mr Tapp. “Employees can raise claims of discrimination, harassment or victimisation in the workplace. A particular remedy for the employee is that they could be compensated for up to three years of their wage if they're successful with discrimination claims,” he said. The objectives of the new law are to enhance employee protection, modernise the workforce and attract and retain top talent, added Mr Tapp. Other notable changes include a clause that employment contracts must be provided to the employee within one month of starting work. The new law goes into more detail around entitlements for part-time employees and provides that part-time working is permitted. It says that employees can take sick leave but with no entitlement to pay during probation. End-of-service gratuity is now payable in all cases where the employee has more than one year’s service. However, employees have the option to participate in a pension or savings scheme as an alternative to gratuity, according to Pinsent Masons. Maternity leave remains 65 working days, but the new law extends maternity rights to employees adopting children under the age of five years old and for women who give birth to a stillborn child or suffer a miscarriage after the start of the 24th week of pregnancy.

More benefits for fully remote employees under ADGM’s new employment law

Those working remotely can also raise claims of discrimination, harassment and victimisation