UAE Ministry Clarifies Annual Leave Regulations for 2026
In February 2026, the United Arab Emirates' Ministry of Human Resources and Emiratisation (MoHRE) issued crucial clarifications regarding annual leave entitlements, specifically addressing the procedures for carrying over unused vacation days into the subsequent year. This guidance has emerged as a vital resource for employees across the UAE who are strategizing their time off or engaging in leave negotiations with their employers.
Standard Annual Leave Entitlement in the UAE
According to established labor regulations, employees working in the UAE are entitled to a minimum of 30 days of fully paid annual leave for each completed year of service, provided they have been employed for at least six months. For individuals who have worked more than six months but less than a full year, the entitlement is calculated at 2 days of leave for each month of service. Most full-time employees receive their 30-day credit upon reaching one year of employment, with employers typically scheduling this leave in mutual agreement with staff or on a rotational basis, requiring at least one month's advance notice.
Carrying Forward Unused Leave to the Next Year
The ministry confirms that unused annual leave can be carried forward to the following year, but this is strictly contingent upon employer approval. Key legal interpretations, as outlined under Cabinet Resolution No. 1 of 2022, specify the following conditions:
- Employees may carry forward up to half of their annual leave entitlement from one year to the next. For instance, if an employee is entitled to 30 days, they can carry forward a maximum of 15 days, provided the employer consents.
- If an employee resigns or is terminated before utilizing their accrued leave, they must be compensated for any unused days, with the payment calculated based on their basic salary at the time the leave was due.
These regulations are grounded in Federal Decree-Law No. 33 of 2021 on labor relations and its accompanying executive regulations, ensuring alignment with the UAE's updated legal framework.
Understanding the UAE's Two-Year Leave Rule
The law further stipulates that employers are prohibited from preventing employees from using their accrued annual leave for more than two consecutive years, unless the employee explicitly requests to carry the leave forward or receive a cash payout instead. In practical terms, this means many employers will endeavor to schedule an employee's unused leave within this two-year window or negotiate a carry-forward or payout arrangement well before the deadline expires. Employers are also mandated to grant at least some portion of leave within any two-year period to comply with this provision.
Cash in Lieu of Leave: Options and Considerations
If mutually agreed upon by both the employee and employer, unused leave days can be converted into a cash payment rather than taken as time off. The payout amount is determined by the employee's basic salary at the time the leave was originally due. This option frequently arises in situations where workers and employers cannot reach a consensus on leave dates, but it is important to note that cash in lieu is not an automatic entitlement. It depends entirely on mutual consent or the specific policies of the company.
Key Takeaways for UAE Employees
- Plan Ahead: Annual leave should ideally be utilized within the year it is earned to maximize benefits and avoid complications.
- Carry-Forward Requires Agreement: Securing employer approval is essential for carrying over any unused leave days to the next year.
- Unused Days Have Monetary Value: Employees are entitled to payment for any unused leave days upon resignation or if they are unable to take the leave, ensuring they receive full compensation.
- Two-Year Protection: Employers cannot obstruct employees from using long-unused leave for more than two years, unless the employee requests a carry-forward or payout, safeguarding employee rights.
As workplaces in the UAE continue to evolve in 2026, with a heightened focus on employee wellbeing and adherence to updated labor laws, a thorough understanding of annual leave rights is crucial. This knowledge helps prevent disputes, facilitates better work-life balance planning, and ensures employees receive all the benefits they are legally entitled to under UAE regulations.
