Can You Request an Annual Raise in UAE?

Can You Request an Annual Raise in UAE?

The labor law in the United Arab Emirates clearly defines what must be included in employment contracts and which additional points can be added based on mutual agreement between employer and employee. A common question that arises is whether a guaranteed annual wage increase can be incorporated into the contract, especially in cases where the employer does not mention it in the initial offer.

What Does the Law Say?

The UAE Federal Decree Law No. 33 of 2021 concerning the regulation of labor relations, along with the associated Cabinet Resolution No. 1/2022, clearly outlines the mandatory elements of an employment contract. These include the details of the employee and employer, job description, place of work, working hours, salary, leave entitlements, and termination conditions.

The law also provides the opportunity for both parties to incorporate additional provisions into the contract by mutual agreement, as long as they do not conflict with the labor law or other applicable regulations. This means that any extra benefit or condition—such as a guaranteed annual wage increase—can be included in the contract if both parties agree to it.

What Does This Mean in Practice?

While an annual pay raise is not a mandatory contract element and UAE laws do not automatically require it, employees have the right to request such a clause. If the employer agrees, this clause becomes legally binding, and the employer must act accordingly in the future.

It is crucial to highlight that the employer is not obligated to accept such a provision. This is because the employer cannot foresee the employee's performance or economic conditions that may affect future pay raises. Nonetheless, some companies, seeking to retain talented employees, are willing to make such agreements.

Which Laws Refer to This Practice?

Article 10 (2) - Allows parties to add new clauses to the contract as long as they do not violate the law.

Article 65 (1) - States that the labor law only determines the minimum employee rights, and more favorable conditions can be enforced if other laws, company policies, or the contract allow it.

What to Consider When Signing a Contract?

1. Put it in Writing – Oral agreements have no legal force. The wage increase clause must be included in the contract in writing.

2. Be Clear – Specify the percentage or basis of calculation, and the review date (e.g., annual review in January).

3. Avoid Conflicts – The clause should not conflict with major legal provisions and should not contradict other parts of the contract.

Summary

UAE labor law provides flexibility for employers and employees to make unique agreements, as long as they do not violate the law. Therefore, if you want a clause concerning a guaranteed annual wage increase in your contract, you have the right to request it—but the decision ultimately rests with the employer.

(The article is based on information that must be included in employment contracts.)