UAE Unemployment Insurance Scheme and New Penalties

As of October 1, employees in the UAE who failed to enroll in the unemployment insurance scheme now face a Dh400 fine. 

Swift administrative measures are promised for non-compliance, including potential deductions from salaries or end-of-service gratuity.

Premium Default Penalties:

Those who subscribe but fail to pay premiums for more than three months will encounter consequences. 

A Dh200 fine is imposed, and persistent non-payment could jeopardize the issuance of new work permits.

The Ministry of Human Resources and Emiratisation (Mohre) provides avenues for checking fines through their app, website, or service centers. 

Employees can opt for installment payments and have the right to appeal the penalty, with decisions guaranteed within 15 working days.

Embracing the Scheme:

As of November 15, over 6.6 million individuals have subscribed to the mandatory unemployment insurance scheme. 

The initiative, launched on January 1, 2023, provides compensation for up to three months for Emiratis and expatriates working in the federal government and private sectors if they face job loss.

New employees in private sector companies receiving work permits after October 1 must subscribe within four months or face a Dh400 fine.

Exemptions and Categories:

Certain groups, including investors, domestic workers, temporary employees, juveniles under 18, eligible retired citizens, and retirees receiving pensions, are exempt from the scheme.

The insurance scheme is bifurcated based on salary levels. Those earning Dh16,000 or below pay Dh5 per month, with a maximum compensation of Dh10,000. Those earning above Dh16,000 pay Dh10 monthly, with a capped compensation of Dh20,000.

Claiming Compensation Conditions:

Employees can claim compensation after 12 consecutive months of subscription. However, claims are void if they leave the country or secure a new job. 

Compensation, set at 60% of the average basic salary six months before unemployment, is provided for a maximum of three months for non-disciplinary terminations.

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