UAE Mandates Unemployment Insurance

15 December 2023

UAE Mandates Unemployment Insurance

UAE Introduces Fines and Work Bans for Uninsured Workers

The UAE has implemented strict measures for workers not enrolled in the mandatory Unemployment Insurance Scheme, with potential fines and work permit denials. The Ministry of Human Resources and Emiratisation (MoHRE) will enforce financial penalties on unregistered workers, amounting to AED400 for non-subscribers and AED200 for those failing to meet payment obligations.As of now, approximately 14% of eligible workers have not yet enrolled in the insurance scheme, despite the legal deadline passing in October 2023, ten months after its initiation on January 1.

Workers can pay fines using the MoHRE smart application, website, or authorized business service centers. To ease the financial burden, the Ministry allows users to submit requests for fee installment plans.

It is crucial for workers to pay fines promptly to avoid administrative measures, including potential denial of new work permits. The fine amount will be deducted from the employee’s salary or end-of-service benefits.

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Key Features of UAE Unemployment Insurance Scheme

  • Over 6.7 million workers have already registered, including citizens and residents in the federal government and private sector.
  • Exemptions include investors, domestic workers, employees with temporary work permits, juveniles under 18, and retirees with pensions who have joined a new employer.
  • The scheme offers social security, providing financial compensation for up to three months following job loss.

How to Enroll in the Unemployment Insurance Scheme

Private-sector employees with work permits obtained after October 1, 2023, must register within four months to avoid a AED400 fine. Registration can be completed through various channels, including the Involuntary Loss of Employment (ILOE) Insurance Pool website, smartphone application, self-service kiosks, ATMs, business service centers, exchange companies, banking applications, SMS text messages, telecom companies’ bills, or the ILOE call center on 600599555.

Insurance Premiums and Compensation

The scheme is divided into two categories based on salary. The first covers those with a basic salary of AED16,000 and under, with an annual premium of AED60 and a maximum monthly compensation of AED10,000. The second category includes those with a basic salary exceeding AED16,000, with an annual premium of AED120 and a maximum monthly compensation of AED20,000.

Workers are eligible for compensation after being subscribed for at least 12 consecutive months. Compensation, calculated at 60% of the average basic salary in the last six months before unemployment, is paid for a maximum of three months, provided the termination is not for disciplinary reasons or voluntary resignation.

 

15 December 2023

UAE Mandates Unemployment Insurance

unemployment insurance

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