From January 1, 2023, all employees in both the private and federal government sectors in the United Arab Emirates (UAE) are required to register for the mandatory unemployment insurance scheme. The deadline for registration is June 30, 2023. On November 2, 2022, the Ministry of Human Resources and Emiratisation (MoHRE) and the Dubai Insurance Company signed an agreement to implement this new unemployment insurance law in the UAE.
Dr. Abdulrahman Al Awar, Minister of Human Resources and Emiratisation, and Butti Obaid Al Mulla, Chairman of Dubai Insurance Company, attended the signing ceremony, which was signed by Khalil Al Khoori, Under-Secretary for Human Resources Affairs at MoHRE, and Abdul Latif Abu Qura, CEO of Dubai Insurance Company.
If employees fail to register for the scheme by this deadline, they will face a financial penalty of DH400. If they fail to register and do not pay any contributions for more than three months, they will be fined an additional DH200. Employees must also pay contributions to the scheme for at least 12 months to be eligible for benefits. This new system provides financial compensation to eligible employees if they lose their job until they find another employment opportunity.
According to Dr. Al Awar, the new law is an important part of the UAE’s efforts to be a global hub for talent, companies, and investments. He added that the agreement will help to accelerate the implementation of the unemployment insurance law and make the labour market more competitive and attractive. The law will cover employees in both the federal government and the private sectors.
Employers are not required to register their employees or pay any contributions to the scheme, but they are advised to remind employees of their obligation to register. The unemployment insurance scheme is only an employee requirement. Exceptions to the registration requirement include investors, domestic helpers, temporary contract workers, juveniles under the age of 18, and retirees who are entitled to a pension and have joined a new job.
The Unemployment Insurance Scheme is a new system that provides financial compensation to eligible employees in the federal government and private sector of the United Arab Emirates (UAE) if they lose their job until they find another employment opportunity.
Below is the complete guide, where we have provided an overview of the Unemployment Insurance Scheme and outlined the steps you can take to ensure that you are eligible for the compensation.
- To be eligible for compensation under the Unemployment Insurance Scheme, you must have been insured for at least 12 continuous months, calculated from the date of your subscription in the insurance system.
- Ensure that you have not been dismissed from your job for disciplinary reasons. The Unemployment Insurance Scheme stipulates that you must not have been dismissed from your job for disciplinary reasons, as outlined in the Law on Regulating Labour Relations and the Human Resources Law in the Federal Government, as well as any other relevant legislation.
- Make sure your compensation claim is not made through fraud or deception. It is important, to be honest, and transparent when making a claim for compensation under the Unemployment Insurance Scheme. If it is found that you have made your claim through fraud or deception, you will not be eligible for compensation. If such a situation arises, the establishment and the insured shall be subject to the penalties and fines stipulated in the Labor Relations Regulation Law and any applicable legislation.
- Check that the establishment where you work is real. If it is found that the establishment in which you work is not real, the penalties outlined in the Law on Regulating Labour Relations and other relevant legislation will apply to both the establishment and you as the insured party.
- Understand the terms and conditions of the scheme. The Unemployment Insurance Scheme applies to all employees in the federal government and private sector in the UAE, except for investors, domestic helpers, part-time employees, juveniles under the age of 18, and retirees who receive a pension.
Here’s how this unemployment insurance scheme can be beneficial for a jobholder:
After losing his job in the private sector, Ahmed found himself struggling to make ends meet. He had been working for the same company for five years, but the business had recently gone bankrupt. Ahmed was worried about how he would pay his bills and support his family. However, he remembered that he had registered for the Unemployment Insurance Scheme when it became mandatory in 2023. He filed a claim and was pleasantly surprised to receive financial compensation that helped him cover his expenses while he searched for a new job. Thanks to the scheme, Ahmed was able to take his time and find the right fit for his skills and experience, rather than feeling pressured to take any available job. He eventually landed a position at a company he was excited about and was grateful for the support he received from the Unemployment Insurance Scheme during a difficult time.
A Step-by-Step Guide On How To Enroll In And File a Claim For The Unemployment Insurance Scheme In The UAE:
Step 1: Determine your subscription cost based on your basic salary. If your basic salary is AED 16,000 or less, you will need to pay a monthly premium of AED 5, or AED 60 annually. If your basic salary is over AED 16,000, you will need to pay a monthly premium of AED 10, or AED 120 annually.
Step 2: Choose your payment frequency. You can pay your premium on a monthly, quarterly, half-yearly, or annual basis.
Step 3: Consider purchasing additional benefits. You can coordinate with the insurance company to subscribe to additional benefits in addition to the basic package.
Step 4: File your claim for compensation within 30 days of unemployment. The insurance company has two weeks to transfer the compensation to your account.
Step 5: Understand the terms and conditions of your insurance policy and the applicable legislations of the Central Bank of the UAE. Compensation will be paid from the date of your job loss and will continue for 3 months or until you find a new job, whichever occurs first.
Step 6: Note that the Ministry of Human Resources and Emiratisation (MoHRE) will report any breaches of the terms and conditions of the insurance policy by the insurance companies. For employees of the federal government, the Federal Authority for Government Human Resources will implement the Unemployment Insurance Scheme in coordination with the Ministry of Finance.
What are the different channels available for subscribing to insurance policies in the United Arab Emirates?
- Bank ATMs & Kiosk machines
- Business service centres
- Du and Etisalat
- Insurance Pool’s website (www.iloe.ae) and its smart application
- Money exchange companies
- Other channels specified by the Ministry of Human Resources and Emiratisation with the service provider (insurance company)
Which entities provide insurance policies in the UAE?
- Abu Dhabi National Insurance Company
- Abu Dhabi National Takaful Company
- Al Ain Ahlia Insurance Company
- Dubai Insurance Company
- Emirates Insurance Company
- National General Insurance Company
- Oman Insurance Company
- Orient Insurance
- Orient UNB Takaful Company
The Unemployment Insurance Scheme in the United Arab Emirates is mandatory for employees, but not for employers. It aims to make the labour market more competitive and attractive and was implemented through an agreement between the Ministry of Human Resources and Emiratisation and the Dubai Insurance Company. Employers are encouraged to remind their employees of the requirement to register for the scheme.