UAE: Workers to be fined for not receiving unemployment insurance – News

Subscriptions to the Involuntary Unemployment website are officially open from January 1, 2023

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UAE employees face financial penalties for not registering for the mandatory unemployment insurance scheme.

From 1 January 2023, all employees working in the private and federal government sectors, including Emiratis or expatriates, will be required to register for the Involuntary Unemployment Scheme. But investors, domestic helpers, temporary contract workers, minors under the age of 18 and retirees who are entitled to a pension and take up a new job are exempt from enrolling in the scheme.

Employees with a base salary of less than Dh16,000 will need to pay Dh5 per month or Dh60 per year, plus VAT as a premium. They will receive unemployment compensation of 60% of their average base salary for three consecutive months.

Under the scheme, employees with a basic salary of more than Dh16,000 are required to pay a premium of Dh10 per month or Dh120 per year.

The policy period is one or two years. Subscriptions to Dubai Insurance are free, but other channels such as exchanges, telcos and banks may charge for additional services.

Baker McKenzie partner Joanna Matthews-Taylor said failure to register with the unemployment insurance scheme would result in a fine of Dh400 for employees.

“If employees are not registered in the insurance scheme and have not paid any fees for more than three months, they will be fined an additional Dh200,” Joanna said.

A call center representative for the Involuntary Unemployment (ILOE) Insurance Scheme confirmed to Khaleej Times that employees have until June 30, 2023 to subscribe or face a Dh400 fine, which can be purchased by purchasing the policy with the employee.

Joanna added that employees must contribute to the plan for at least 12 months.

Lawyers for Baker McKenzie noted that benefits under the scheme would cease from the earlier of the date the employee was offered an alternative job in the UAE or three months from the last day of employment.

Joanna added that employers are not required to enroll their employees in the insurance plan, nor are employers required to pay anything for the plan.

Unemployment insurance programs are employee requirements only. However, she added, employers are advised to remind employees of their obligation to register.

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