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Non-compliant companies will have to pay fines of thousands of dirhams for every Emiratis not employed starting January 1, 2023
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Emiratization – the employment of Emiratis – is one of the top priorities of the UAE government. Earlier this year, the UAE Cabinet announced a comprehensive plan to promote the Emiratization of the private sector.
Companies are mandated to increase the number of UAE citizens in their workforce, which will help create around 75,000 jobs by 2026. Companies that exceed the target will receive several incentives, including an 80% discount on service charges from the Ministry of Human Resources and Emiratisation.
From January 1, 2023, non-compliant companies will have to pay fines of thousands of dirhams for each Emiratis not employed.
Here’s everything you need to know:
What are the latest Emiratisation targets?
UAE companies with 50 or more employees are required to increase their Emiratisation rate by 2% per annum in their overall technical jobs. By the end of this year, 2 percent of a company’s skilled workforce must be Emirati. This must increase by 2% per year, reaching 10% by 2026.
What is the financial penalty for failing to meet the target?
From January 2023, every Emiratis who is not employed will be fined Dh6,000 per month. This equates to Dh72,000 per year. The fine will increase by Dh1,000 per year.
case analysis
Assuming a company has 100 employees, it needs to have at least two UAE employees by the end of the year. If two Emiratis are not hired by then, the monthly penalty is Dh12,000 (Dh6,000 for each unemployed Emiratis). If this continues for a full year, the total fine will be Dh144,000 per year (Dh72,000 for each unemployed Emiratis).
How are fines paid?
According to the details announced earlier, the total amount of fines is paid on an annual basis and is paid in installments during the year. The information posted on the official website of the UAE government stated that the payment should be made through MoHRE’s digital system.
Also read:
Warning Against False Chiefization
If a business carries out false Emiratization to benefit from the Nafis scheme, it will be fined between Dh20,000 and Dh100,000 per fake Emirati employee. The same penalties apply to companies that submit incorrect documents or data for benefit.
An administrative fine of AED 20,000 per UAE employee will be imposed if the beneficiary does not attend work after the permit is issued and the company fails to report. The same penalty applies if the business fails to report to Nafis that the beneficiary has stopped working.
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