This article has been researched and written by Sam Thomas and the team at Creation Business Consultants and has not used AI in generating this article.
Effective immediately, the UAE Ministry of Human Resources & Emiratisation (MoHRE) requires employees in the Federal Government & private sector to register to a mandatory unemployment insurance scheme. The categories are:
Employees earning less than AED 16,000 must contribute a minimum of AED 5 + VAT per month to their selected scheme. This includes a Maximum Claim Benefit of 10,000 AED per month.
Employees earning more than AED 16,000 must contribute a minimum of AED 10 + VAT per month to their selected scheme. This includes a Maximum Claim Benefit of 20,000 AED per month.
Any employee failing to register to the unemployment insurance scheme will receive in a penalty of AED 400.
BENEFITS UNDER THE SCHEME
It aims to provide a job safety net to support employees while providing career stability. This entitles the employee to 3 months compensation, equal to 60% of their monthly salary if the employee loses their job due to termination. This is conditional upon the employee subscribing to the scheme for at least 12 months.
1. Are employers required to register employees in the insurance scheme?
No, employers are not required to pay any contributions or register their employees for the insurance scheme, however, they are advised to remind the employees of their legal obligations.
2. What are employees required to do?
There are various ways an employee can register to the insurance scheme e.g., ILOE portal (link below), ILOE Mobile App, Al Ansari Exchange, Du/Etisalat, SMS, Bank Apps, Business Centres & Kiosk (UPAY) & ATMs.
3. Are there any exemptions?
Yes, exempted categories for the unemployment insurance scheme are:
- Investors (owners of companies they work at).
- Domestic helpers.
- Temporary-contract workers.
- Juveniles under the age of 18.
- Retirees who are entitled to a pension & joined a new job.
4. What are the payment options?
The payment options available for the unemployment insurance scheme are Monthly, Quarterly, Semi-Annually, or Annually/Full.
5. Will employees who resign benefit from the insurance scheme?
No, employees who resign or who are dismissed for disciplinary reasons will not benefit from the scheme.