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“UAE: Non-compliance with Unemployment Insurance Results in Dh400 Fine, Deducted from Salaries”

The UAE has imposed fines for employees failing to subscribe to the unemployment insurance scheme by the October 1 deadline. Those who missed the deadline will face a Dh400 fine, while individuals who subscribed but failed to pay premiums for more than three months will be fined Dh200. The Ministry of Human Resources and Emiratisation (Mohre) warns of potential “administrative measures,” and unpaid fines could result in the denial of new work permits.

Fine Enforcement and Deductions

Employees can check if fines apply to them through the Mohre app, website, or business service centers. Fines can be paid in installments, deducted from salaries, or from end-of-service gratuity. Individuals fined have the option to appeal the penalty, with decisions issued within 15 working days.

Subscribers and Scheme Overview: Unemployment Insurance

As of November 15, over 6.6 million people have subscribed to the mandatory unemployment insurance scheme, which took effect on January 1, 2023. The scheme provides compensation for up to three months for Emiratis and expatriates employed in the federal government and private sectors who lose their jobs.

Deadline and Exemptions

Employees in private sector companies receiving work permits after October 1 must subscribe to the scheme within four months to avoid a Dh400 fine. Certain groups, such as investors, domestic workers, temporary employees, juveniles under 18, citizens eligible for retirement, and retirees receiving pensions, are exempt from unemployment insurance.

Scheme Categories and Compensation

The scheme comprises two categories based on salary. Those with a basic salary of Dh16,000 or below pay Dh5 per month (Dh60 annually), with a maximum monthly compensation of Dh10,000. Individuals with a basic salary exceeding Dh16,000 pay Dh10 per month (Dh120 annually), with a maximum monthly compensation of Dh20,000. Compensation can be claimed after 12 consecutive months of subscription.

Claim Conditions

Employees can claim compensation if they have been subscribed for at least 12 consecutive months and are not leaving the country or securing a new job. Compensation is granted for a maximum of three months from the date of unemployment, excluding terminations for disciplinary reasons. The amount is calculated at 60% of the average basic salary in the six months preceding unemployment.

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