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Since 2006, the UAE has been implementing Emiratisation in some form, a move to encourage companies to hire more UAE nationals in UAE-based companies. From January 2023, a new set of targets and corresponding fines for non-compliance will come into effect.
“Different programmes have been implemented over the years to ensure that private sector organisations attract and employ UAE nationals in their workforce,” said Rebecca Ford, a lawyer with Clyde in Dubai. “I think the latest plan that has been announced is the most ambitious.”
Contents of the new plan
The new Emiratisation plan requires companies to have at least 2% of their workforce in the country be Emiratis by December. After the end of 2022, the target percentage increases, requiring 4% of the workforce to be made up of Emiratis by the end of 2023. The target percentage is increased to 6% by 2024, 8% by 2025, and the required percentage of Emiratis in the company by 2026 is 10%.
“If you just look at the population distribution, the UAE has a population of nearly 10 million people. Of these, only 11% of the population are Emirati nationals,” said Rajiv Suri, a lawyer at Alsuwaidi & Company in Dubai. “The idea of Emiratisation is fundamental. The above is the introduction of UAE nationals into the labour market.”
New Violation Fines
A key aspect of the new plan is that, after January 2023, companies will be fined for not complying with the new Emiratisation requirements.
“It’s an ambitious plan, and it’s really a very aggressive plan, because if an organization fails to meet their goals, they have to pay a penalty, and essentially the way they calculate the penalty is a monthly penalty,” “Then multiply that by the number of Emiratis the company failed to actually hire, and then multiply that by 12 months,” Ford said.
Every year, the fines are increasing. In the first year, fines will start at AED 6,000 (about $1,634) and then increase by AED 1,000 (about $272) every year. The fine will increase to Dh10,000 (about $2,723) a month by 2026, Suri said.
How should companies prepare
Companies that haven’t started preparing for the change should start making short-term and long-term plans to meet quotas.
“I think if they haven’t really focused on this historically, then they really need to start thinking, do they have positions that are currently being recruited, can they be filled by Emiratis? If they don’t have any current roles, then What other solutions do they have to ensure they grow the UAE population by the end of December this year?” Ford said.
Ford added that employers may consider speeding up hiring for positions they would not necessarily be hiring this year, limited to Emirati candidates.
Companies that have already laid the groundwork for a strong Emirati employee base will more easily adapt to the new quota. For other companies, it will be necessary to find ways to continuously recruit and retain Emirati employees.
“This will be a significant change for many organisations in terms of how they approach and attract Emirati candidates,” Ford said. “An important element of the company’s strategy is not just attracting new Emirati talent, but actually retaining existing ones. of Emirati employees who may be lured away by other organisations looking to increase their quota.”
Incentives other than fines
In addition to fines, companies have incentives to recruit more Emiratis, including subsidies for UAE nationals and private institutions.
Overall, the new quotas and fines will help bring more Emiratis into the UAE labour market. “I think this is a very good move that will not only help Emirati nationals integrate into the labour market, but also drive more investment and diversify the population,” Suri said. “It will definitely lead to a diversification of the workforce.”
Katie Nadworny is a freelance writer based in Istanbul.
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