UAE Unemployment Insurance Scheme Update | Publications | Insights & Events

Federal Decree No. 13 of 2022 on Unemployment Insurance (Unemployment Insurance Law), which came into effect on 1 January 2023, requires UAE nationals and expatriate employees working full-time in the UAE federal and private sectors to participate in the Unemployment Insurance Scheme (Scheme).

The scheme will pay employees up to three months in cash if they lose their job. Compensation is paid from the date the employee becomes unemployed and is calculated at 60% of his basic salary. Employees earning less than Dh16,000 can receive up to Dh10,000 per month and those earning more than Dh16,000 can receive up to Dh20,000 per month. Employees are eligible to benefit from the plan if they have worked and subscribed to the plan for at least 12 months and they have not been terminated for disciplinary reasons or resigned. Employees who work on a commission basis can also subscribe to the plan. However, covered employees are not eligible for payment if they leave the country or start a new job.

Initially, all mainland employees were required to participate in the scheme; however, in a major update, the UAE government has confirmed that the scheme is now mandatory Applies to employees of free zone and semi-government employers, except employees of entities registered with the Dubai International Financial Center (DIFC) and Abu Dhabi Global Market (ADGM). While employees of DIFC and ADGM are not obliged to join the scheme, employees of entities registered in these financial free zones can join the scheme voluntarily.The deadline for employee applications is June 30, 2023 Or, if the employee was hired after January 1, 2023, four months from their respective start dates.

While employers are not required to enroll their employees in the program or pay any fees to them, we recommend that employers inform and educate their employees about their obligation to participate in the program. Failure to comply with the program may expose employees to the risk of fines and affect the ability of employees to renew their work permits, pending any outstanding fines.

Please feel free to contact our Middle East Labor and Employment Practice and we will be happy to assist in preparing employee newsletters to educate employees, answer questions related to the program, and help you better understand unemployment insurance laws and program implementation.