UAE Employer Fined AED 50,000 for Sponsoring Foreign Worker Without Actual Employment

Question: I am an employer. An employee is sponsored under the company’s residence visa but is not actually working for the company. The question is what penalties may be imposed on the company in such circumstances, and which authority has jurisdiction to impose such penalties?

First, pursuant to Article 25(2) of Federal Decree-Law No. (29) of 2021 Concerning Entry and Residence of Foreigners, any person who recruits a foreigner for the purpose of employment in accordance with the provisions of the Law by Decree but fails to employ that person or permits him/her to work for another party without following the legally prescribed procedures, shall be subject to a fine of AED 50,000.

The distinction between these two provisions was addressed by the Dubai Court of Cassation (Criminal Cassation No. 720/2024, judgment dated 22 January 2025), which distinguished between two situations: the case of the worker who actually worked to the employer then the latter allow him to work for another party, then the applicable law is the Labor Relations Law. And the case the employer brought the worker into the country for the purpose of employment but did not employ him or allowed him to work for another party before he began working for him, then the applicable law is the law on the entry and residence of foreigners.