The bill widens the definition of offences and increases the prison term to life for crimes against women, children or the disabled, or where the perpetrator is a guardian of the victim.
"In the proposed law, human trafficking is defined to include all forms of sexual exploitation, involuntary servitude, enslaving, slave trading and all similar practices," state media quoted a government official as saying on Monday.
The bill will be sent to the cabinet for endorsement.
The UAE, along with Qatar and Kuwait, were elevated last month from the lowest ranks of human trafficking offenders in the US State Department's 2006 Trafficking in Persons report.
The three Gulf Arab countries were raised from Tier 3 countries - the poorest rating - to the Tier 2 Watch List in the report to the US congress on June 5.
Qatar and the UAE moved up from
Tier 3, but Saudi Arabia stayed
Saudi Arabia is the only remaining Gulf Arab country in Tier 3, for governments deemed to not be making significant efforts to address the issue.
Last year, the UAE outlawed using children under 18 in camel races, a practice condemned internationally as a form of slavery.
Before the law was passed, rights groups said several thousand boys, some as young as four, had worked as jockeys in the beduin sport popular in the Gulf Arab states.
Human rights groups said that children, mainly from poor Asian and African countries, had been abducted or sold by their families, and that the boys were kept in prison-like conditions and were underfed to keep them light so the camels could run faster.
Gulf Arab states were criticised
for using child camel race jockeys
They also accused the oil-producing country of turning a blind eye to the non-payment of wages, lack of medical care and sub-standard housing for workers who form the backbone of an economy thriving on high oil prices.
Washington is negotiating a free-trade pact with the UAE and is pressing Abu Dhabi to apply international standards to its workforce.
Foreigners, from labourers to middle- and high-income executives, make up more than 85% of the four million-strong population.