UAE employees must subscribe to unemployment benefit scheme by January 1

Unemployment insurance benefits will be paid by employees on a monthly, quarterly, semi-annual or annual basis, and the value of the policy is subject to value added tax (VAT), Wam said.

“The new unemployment insurance law is an important part of the legislation and legal structure that the government is keen to develop to meet the needs of the national economy,” said Dr Abdulrahman Al Awar, Minister of Human Resources and Emirate.

“This supports the UAE’s efforts to become the next capital of the future, and a global incubator for talent, companies and investment, which can be achieved through economic and social development and empowerment of human capital.”

In May, Dr Al Awar announced a new federal law covering the scheme, which is mandatory and will pay Emiratis and residents of the private and public sectors up to three months in cash if they lose their jobs.

The ministry said at the time that the purpose of the new system is to provide a social security scheme to ensure a decent life for Emiratis and resident employees during periods of unemployment and to reduce business risks.

“It also creates a safety net that supports employees’ career paths and ensures their livelihoods by relying on mechanisms that do not impose additional costs on employers and are paid for by employees,” Wam said.

The ministry said the monthly cash amount for the first category of employees will not exceed Dh10,000 and the second category will not exceed Dh20,000 and will be calculated at 60% of the basic salary.

Insured employees who lose their jobs must submit a claim through the three approved claim channels of the insurance pool’s e-portal, smart app and call center within 30 days from the date of unemployment.

Compensation will be paid within two weeks from the date of the claim, up to a maximum of three months per claim.

Employees are eligible for unemployment benefits if they have been employed and enrolled in an insurance plan for at least 12 months, as long as they have not been fired for disciplinary reasons or resignation.

Insured employees are also not eligible for payments if they leave the country or start a new job.

Investors, such as owners of establishments where they work, domestic workers, part-time employees, workers under the age of 18, and retirees receiving pensions and joining new jobs, will not be covered by the insurance plan.

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UAE unemployment benefits – in pictures

The Unemployment Insurance Scheme Framework Agreement was signed in the presence of Dr. Al Awar and Butti Obaid Al Mulla, Chairman of Dubai Insurance Company. It was signed by Khalil Al Khoori, Deputy Minister of Human Resources Affairs, Ministry of Human Resources and Emiratization, and Abdul Latif Abu Qura, CEO of Dubai Insurance Company.

“We are keen to accelerate the implementation of the Unemployment Insurance Act through this agreement, which outlines the practical details of implementing its provisions locally, including federal and private sector employees, resulting in a highly competitive and attractive labor market while strengthening the workforce stability in order to be able to contribute to building the best and most dynamic economy in the world,” said Dr Al Awar.

The UAE, the second largest economy in the Arab world, has undertaken several economic, legal and social reforms in recent years to strengthen its business environment, increase foreign direct investment, attract skilled workers and provide incentives for companies to set up or expand operations.

Government reforms to several visa schemes have also increased opportunities for foreign workers to live and work in the UAE, including 10-Year Golden Residency Program Simplify eligibility criteria and expand beneficiary categories.

This green visa Five-year residency for skilled workers without a sponsor or employer was also introduced.

The ministry said employees can subscribe to insurance plans in a number of ways, including the insurance pool’s website, smart apps, bank ATMs, self-service terminals, business service centers, currency exchange companies, and du and Etisalat or text messages.

Updated: November 2, 2022 at 5:51 pm