UAE's Resolution 318: A Crackdown on Fake Employment

The Ministry of Human Resources and Emiratisation (“Ministry”) has recently issued Resolution No. 318 of 2024 (“Resolution”) combatting the fake employment issue in the UAE. This Resolution targets companies that claim to employ workers “without a legitimate employment relationship” or fail to perform their licensed functions pertaining to their employees. The initiative is part of a broader effort to ensure compliance with labor laws and protect workers’ rights.

To ensure compliance with the Resolution, the Ministry will implement a robust monitoring process using its inspection system and take administrative measures against violators until the status of the affected workers is corrected and settled―details of which are mentioned here under

Major Administrative Sanctions:

In case of a proven violation, the Ministry, subject to its discretion, may impose the following administrative sanctions on the violating companies:

• Suspension of Work Permits: The Ministry can suspend or freeze the work permits issued to the violating company.
• Fines: Such violating companies shall be subject to administrative fines.
• Reclassification of the Status of the Companies: The Ministry can also reclassify the violating entity to a “category three establishment”.
• Suspension of Businesses: Sole proprietorships and businesses owned exclusively by the violating owner will be suspended. This includes all companies under the same ownership, except for cases involving canceling a work permit or filing an absconding report.
• Restrictions on Non-compliant Owners: Owners of non-compliant businesses will be prohibited from registering new establishments in the Ministry’s database.
• Fictitious Emiratisation: If citizens are registered in these establishments under false pretenses, the prescribed procedures for handling fictitious Emiratisation will be applied.
• Enforcement of Penalties Regulations: Administrative and penal sanctions will be enforced against these establishments in compliance with Federal Decree-Law No. 33 of 2021, its executive regulations, and implementation decisions.

Vital Implications

It is crucial for UAE entities to duly register their employees with the Ministry and execute thorough employment agreements, regardless of the employment type being full-time, part-time, temporary, or remote. If you have any employment matters or need help in reviewing or drafting your employment agreements, please feel free to write to us at [email protected]. Team RAS Corporate Advisors is here to help ensure your compliance with these new regulations and support your business in maintaining lawful and fair employment practices.

- Blog by Nehan Zehra