Mandatory UAE Unemployment Insurance Scheme | A Detailed Guide

The U.A.E. Minister of Human Resources issued a new decision regarding the Unemployment Insurance system.?Presently, the Dubai Insurance Company is appointed as the provider of the Unemployment Insurance Scheme.

Subscription in the Unemployment Insurance

The Unemployment Insurance is applicable to #residents and #nationals of both the #public & #privatesector - It is a mandatory requirement for employees, not employers. The Unemployment Insurance has two categories primarily. ?

Category 1 - Payment of AED 5.00 if the basic salary is less than AED 16,000.00.?

Category 2 - Payment of AED 10.00 if the basic salary is more than AED 16,000.00.?

Subscription Fee Payment

#subscription fee for the #unemploymentinsurance can be paid through:

1. The insurance provider’s website;
2. The insurer’s mobile application;
3. The insurer’s call center;
4. Ministry approved business centers;
5. ATMs and Kiosks as set by the insurer, and in coordination with MOHRE;
6. Exchange houses;
7. SMS.

An insured can choose to pay either monthly; quarterly; bi-annually; or annually.

Payment Obligation

If an insured does not pay based on the plan for more than three months from the due date, the insurance #policy is considered terminated.?And, a financial #penalty shall be imposed.

Submission of a Claim

• An employee must submit his claim for coverage within thirty days from the termination of the employment relationship.?
• The compensation due to the employee shall be 60% of the basic salary. It is calculated based on the average for the previous six months.?And, the compensation amount shall not exceed three months’ salary.
• The insurance provider must pay the compensation amount within no more than two weeks of the applicant submitting all the necessary documents.

Fines & Suspensions

1. Non-Subscription.?An employee who does not subscribe to the unemployment insurance is liable to pay AED 400.00 after the registration period ends (June 30, 2023).
2. Non-Payment of Subscription.?If an employee subscribes, and does not pay within three months of the payment due date, a penalty of AED 200.00 will be imposed.
3. Non-Payment of Penalty.?If an #employee does not pay the fine within three months of when it is due, the fine shall be deducted from his salary through the Wage Protection System, or from his end of service, or any other system MOHRE decides.
4. Work Permit Suspension. MOHRE will suspend issuance of any new work permits for an employee who has not paid the penalties imposed for non-subscription or non-payment.

Employees Exempted from Subscribing

1. #investors (such as owners of firms in which they work),
2. #domesticworkers
3. #parttimejob workers,
4. #workers below 18 years old,
5. #retirees who receive a pension and have joined a new job.
6. #freezoneuae employees.

Grace Period

Employees have until June 30, 2023 to register following which, penalties will be imposed. For employees who have been employed after January 1, 2023, must register within four months from:

1. When they entered the #uae with the employment entry permit; OR
2. From the change of status; OR
3. The final approval of the work permit issuance for employees who do not need a change of status.

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