In a major move to enforce compliance and protect labor rights, the UAE Ministry of Human Resources and Emiratisation (MoHRE) has imposed fines exceeding AED 34 million on nearly 1,300 companies found to be inactive yet employing workers on record. This decisive action, announced on June 30, 2025, comes as part of MoHRE’s efforts to uphold fair labor practices and transparency in the private sector.
Read the full MoHRE press release here
The fines target companies that registered licenses but did not actively engage in their declared business activities maintaining registered workers, a violation of UAE labor laws. According to MoHRE, these firms were discovered through its smart monitoring system, which tracks discrepancies between registered activity and actual operations.
“The establishments were exploiting work permits to employ workers outside the scope of their licensed activities or not operating at all. This practice undermines the UAE’s labor market integrity and exposes workers to exploitation,” MoHRE stated.
Beyond the fines, MoHRE has taken further action:
- Suspension of new work permit applications by these companies.
- Downgrading of their classification to Category 3 (lowest), resulting in higher fees and stricter scrutiny.
- Blocking of new business registrations under the same ownership.
The Ministry urged businesses to maintain accurate records, ensure active engagement in their licensed activities, and adhere to employment regulations to avoid similar penalties.
See the WAM article on the fines and measures here
Why This Matters for UAE Businesses
This unprecedented crackdown serves as a strong reminder for companies operating in the UAE: compliance with licensed activities is not optional. Businesses must align actual operations with their trade licenses, accurately report workforce details, and avoid any misuse of work permits.
Non-compliance can now result in significant financial penalties, restrictions on future business activities, and reputational damage in one of the region’s most competitive business environments.
Benoy Jacob is a journalist-turned-business consultant, currently serving as the Director of Client Relations at ATB Corporate in Abu Dhabi. With a keen eye for market trends and business strategy, he helps companies expand, build strategic partnerships, and optimize their operations in the UAE. Benoy brings a unique perspective on economic policies, trade ecosystems, and investment opportunities in Abu Dhabi and the wider MENA region.