The Ministry of Human Resources and Emiratisation has declared major changes to the minimum wage for Emiratis working in private companies. Via the ministry’s mobile application, it confirmed that the minimum salary will be set at AED 6,000 for all UAE citizens employed in the private sector. The change comes into effect on Thursday, January 1, and will require companies to adjust Emirati employees’ salaries to meet the new threshold.
In a statement published on the X platform, the ministry clarified that the new requirement applies to the issuance, renewal, and modification of work permits for citizens. The MoHRE smart application will also notify companies that they have until June 30, 2026, to implement the new minimum. Previously, the minimum salary for Emiratis stood at AED 5,000. It is important to note that UAE labour law does not provide for a minimum wage for non-residents. The law only includes provisions requiring salaries to be sufficient to meet employees’ basic needs. This asymmetry creates a two-tier wage system in which citizens are protected by a guaranteed minimum, while expatriate workers negotiate pay based on market conditions.
Companies given six months to adjust salary structures
The new rules apply only to work permits issued to citizens for a two-year period, MoHRE explained. The ministry will send private companies the following notice: “The minimum salary value for citizens in the private sector is AED 6,000, effective from 01/01/2026. From this date, printing or delivering any citizen work permit application (issuance, renewal, modification) will not be permitted if the salary is less than AED 6,000, with a note requiring salary adjustment.” If a citizen’s salary is not adjusted by June 30, 2026, the following procedures will apply from the next day:
- The citizen will not be counted in localisation ratios until the salary is adjusted
- A restriction will be placed on the establishment: “Suspension of new permits for citizens with salaries below AED 6,000”
The choice signifies government pressure on the private sector to make employment more attractive to Emiratis, who have traditionally preferred public-sector jobs for better conditions and stability. The 20 percent increase is intended to narrow the gap between public and private employment, making the latter more competitive in attracting local talent. For those following the latest real estate news, rising guaranteed incomes for Emirati households could stimulate demand in the mid-market housing segment, as young citizens earning AED 6,000 may become eligible for mortgages and begin considering buying a first home rather than continuing to rent or live with parents. Companies will face higher employment costs when hiring Emiratis, which could slow the pace of Emiratisation in low-margin sectors. Retail, hospitality, and some service sectors function on thin profits, where a 20 percent increase in the wage bill for local staff requires either revising business models or passing costs on to consumers through higher prices.
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Uncertainty for long-term planning
Limiting the new rules to a two-year period calls into question the future course of the minimum wage. Companies do not know whether the threshold will rise again after two years, remain unchanged, or be revised altogether. This uncertainty complicates long-term financial planning and may make employers more cautious about hiring Emiratis into positions where pay levels sit close to the minimum. The process of adjusting salaries resembles the key steps to buying a home in Fujairah, in that it requires following a clear sequence of actions with strict deadlines. Missing deadlines leads to penalties — loss of a deposit in real estate transactions, or exclusion from localisation ratios and blocked permits in the labour context.
Localisation ratios are critical for larger companies that are required to maintain a certain percentage of Emirati employees. Losing the ability to count workers earning below the minimum toward these ratios creates the risk of fines and restrictions on business expansion through hiring additional foreign staff. Blocking new permits for citizens with salaries below AED 6,000 effectively prevents companies from hiring Emiratis into low-paid roles after the deadline.
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This could result in small businesses opting out of hiring citizens altogether if they cannot afford to pay AED 6,000 for positions where market wages are significantly lower. The absence of a minimum wage for non-residents preserves employers’ flexibility to hire foreign specialists on market-driven terms. However, it also creates the potential for discriminatory practices, where two employees in identical roles receive different pay solely because of their citizenship. While the law requires salaries to be sufficient for basic needs, this standard is vague and subject to inspector interpretation.
The ministry is enforcing the new rules through digital tools that automatically block permit processing for salaries below the threshold. This removes the possibility of bypassing requirements through personal connections or bureaucratic loopholes, making compliance unavoidable for all labour-market participants. The higher minimum will also affect compensation structures above entry level. If junior roles pay AED 6,000, mid-level employees will expect proportional increases to maintain internal equity. This creates a cascading effect that pushes the entire pay scale upward, increasing overall personnel costs beyond the direct impact of the minimum wage change.
