UAE Issues Insurance Warning for All Employees Before October 1 Fine Deadline
UAE workers must sign up for mandatory job loss insurance before October 1 or face fines, said the Ministry of Human Resources and Emiratisation (MoHRE).
The MOHRE called on UAE citizens and residents eligible for the Unemployment Insurance Scheme to register in the system before October 1 to avoid an AED400 fine.
The Ministry said it has provided the option for employers to register their employees in the system, however, “it is the employee’s responsibility to enrol in the system, not the employer’s, who incurs no additional costs.”
The UAE scheme applies to all workers in the private and federal sectors, both citizens and residents, excluding investors (business owners who own and manage their businesses themselves), domestic workers, temporary employees, minors under the age of 18, and retirees who receive pension and have joined a new employer.
Subscription can be completed by visiting the Involuntary Loss of Employment (ILOE) Insurance Pool website, the ILOE smartphone application, as well as kiosks, business service centres, exchange companies (such as Al Ansari), and banks’ smartphone applications.
The insurance scheme is divided into two categories:
- The first covers those with a basic salary of AED16,000 or below, where the insurance premium for the insured employee in this category is set at AED5 per month (AED60 annually), and the maximum monthly compensation is set at AED10,000
- The second category includes those with a basic salary exceeding AED16,000, and the insurance premium is AED10 per month (AED120 annually). The monthly compensation for this category is capped at AED20,000
The insurance compensation can be claimed as long as the insurer (employee) has been subscribed to the Unemployment Insurance Scheme for at least 12 consecutive months.
The insured’s right to compensation is forfeited in the event that he/she cancels their residency and leaves the country or joins a new job, within the processing period.
The insurance claim will be processed within two weeks of submission. The compensation is calculated at the rate of 60 per cent of the average basic salary in the past six months before unemployment and paid for a maximum of three months for each claim from the date of unemployment, provided the employee in question was not terminated for disciplinary reasons, and has not voluntarily resigned.
The system aims to strengthen the UAE job market and provide social protection for workers to ensure a decent life for them and their families until alternative employment opportunities are available, in addition to attracting the best talents to the country.
