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UAE: 6 things to know about the mandatory unemployment insurance scheme

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1. You need to subscribe for one year to benefit

According to the announcement issued by Human Resources and Emirates (MOHRE), to be eligible for compensation under the insurance plan, you must have been in your previous job for at least 12 consecutive months, counting from the date you subscribed to the insurance plan. So, the sooner you purchase coverage, the sooner you will be eligible for benefits.

2. Can receive 60% of basic salary within three months

According to details released by MOHRE, if an employee is eligible for compensation under the new scheme, he or she will receive 60% of his or her base salary.

your basic salary is different from the gross salary you may receive each month, or Based on frequency decided between you and your employer.

There is also a cap on this payout, which you should keep in mind. According to the regulations, employees belonging to category A (up to Dh16,000 in basic salary) will receive 60% of the basic salary up to Dh10,000.

If you are in category B (base salary Dh16,000 and above), you will again receive 60% of your base salary, up to a maximum of Dh20,000.

What is base salary or base salary?

According to the UAE Labor Law – Federal Decree No. (33) of 2021 on the Employment Relationship – your basic salary or base salary is the wage stated in your employment contract, taking into account your work under the employment relationship paid contract.
However, many employment contracts may provide additional perks for housing, transportation or other incentives. Your gross salary includes base salary and these allowances, which cover living expenses or are provided as a percentage of sales or profits earned by the worker.
It’s important to note that your honorarium is also based on your base salary.

3. Resignation does not apply

Another key point to remember is that this insurance is implemented to provide social support to employees who may lose their job due to reasons beyond their control. According to MOHRE, workers will not be compensated:

• Dismissal for disciplinary reasons.
• People who quit their jobs.
• Who has left the UAE
• People who join new jobs.

4. If you find a new job within three months, you will not continue to receive bonuses

Article 5(4) of Federal Decree No. 13 of 2022 on the Unemployment Insurance Scheme states: “During the period of entitlement to compensation, if the worker or employee is employed by another employer, the payment of compensation shall cease.”

5. Applicable only if residing in the UAE

Article 9 of Cabinet Resolution No. 97 of 2022 on Procedures and Controls for Implementation of the Unemployment Insurance Scheme sets out certain conditions to be fulfilled by insured persons to enjoy insurance coverage. Paragraph 9 of this article stipulates: “The insured must have a legal residence in this country.”

6. Your claim must be honored within two weeks

Clause 13 of the same Cabinet Resolution states: “If the insured is entitled to compensation, the service provider must make payment within two weeks of receipt of a claim meeting the established eligibility criteria, provided the service provider transfers the payment in the manner determined by the insured Transfer the compensation to the insured’s account…”

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