Brief
UAE fines employers up to AED 1 million for sponsoring idle workers
Two legal provisions set penalties for companies that sponsor employees who never work for them, with fines ranging from AED 50,000 to AED 1 million.
By Felo News Desk · Published
Gulf News outlines the penalties that can be imposed on UAE companies that sponsor a foreign employee who never works for them. The answer cites two legal provisions that apply depending on the circumstances.
Under Article 25(2) of Federal Decree‑Law No. 29 of 2021 on entry and residence of foreigners, an employer who recruits a foreigner for a job but fails to employ the person, or allows the person to work for another party without following prescribed procedures, faces a fine of AED 50,000.
Article 60 of the Labour Relations Law provides a higher fine, ranging from AED 100,000 to AED 1,000,000, for hiring a worker and leaving them unemployed. The Dubai Court of Cassation clarified the distinction in a 2025 judgment: if the worker initially works for the employer and is later allowed to work elsewhere, the Labour Relations Law applies; if the employer never employs the worker before they work for another party, the entry‑and‑residence law applies.
Key facts
- Employers who sponsor a foreign worker but do not employ them can be fined AED 50,000 under Federal Decree‑Law No. 29 of 2021. (gulfnews.com)
- The Labour Relations Law imposes fines of AED 100,000 to AED 1,000,000 for hiring a worker and leaving them unemployed. (gulfnews.com)
- The Dubai Court of Cassation clarified the applicable law based on whether the worker ever worked for the sponsoring employer. (gulfnews.com)
Sources
- [1] gulfnews.com — originally reported as “What are the penalties for sponsoring an employee who isn't working for the company in the UAE?”
