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The Ministry of Human Resources and Emiratisation (MoHRE) in UAE has reaffirmed its commitment to enforcing labour regulations by taking strict action against businesses found to be non-compliant with their licensed activities while maintaining registered workers without genuine employment relationships.
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Since the start of 2025, MoHRE’s monitoring system has identified around 1,300 establishments, linked to approximately 1,800 business owners, that were not actively engaged in their approved commercial operations. Despite being inactive, these establishments had one or more registered employees without any real employment relationship, according to a report from the Emirates News Agency (WAM).
In response, MoHRE imposed penalties exceeding Dhs34 million, suspended the issuance of new work permits for these entities, and downgraded them to the third category within the Ministry’s classification system for private sector establishments.
Legal action targets both employers and workers
The Ministry has also barred the owners of these non-compliant establishments from registering any new businesses in its system, in line with its continued efforts to ensure adherence to UAE labour laws and regulations.
These actions are backed by Federal Decree-Law No. 33 of 2021 on Regulating Labour Relations, Cabinet Resolution No. 21 of 2020 regarding service fees and administrative fines, and Ministerial Resolution No. 318 of 2024, which governs how authorities handle cases involving establishments that register workers but do not carry out licensed operations.
MoHRE has urged employers to cancel licences and update the legal status of their workers if an establishment ceases operations for any reason. Failure to do so could result in legal liability for both business owners and registered employees.
An inactive licensed business that retains workers without actual employment is considered a serious legal violation. The consequences apply to all parties involved, especially when no legitimate employment link exists.
The ministry also underscored the effectiveness of its field-based and smart monitoring systems, which use comprehensive data and indicators—including worker sponsorships, licensing activity, transaction records, and field inspections—to evaluate whether a business is operational.
