Picture for illustrative purposes only.


UAE issues new rule on bank guarantees, workers’ protection insurance

A new UAE rule obligates private sector companies to provide bank guarantees worth Dh3,000 for each worker or a 30-month employees’ protection insurance coverage worth Dh20,000.

Dr. Abdulrahman Al Awar, Minister of Human Resources and Emiratisation, issued a new resolution on the matter to “preserve workers’ rights”.

Aisha Belharfia, Assistant Undersecretary for Labour Affairs at the Ministry of Human Resources and Emiratisation, said companies have the option of choosing between providing a bank guarantee or an insurance policy for their workers.

Under the new resolution, establishments may provide a bank guarantee of no less than Dh3,000 for each worker, paid through a UAE-based bank.

The bank guarantee is valid for one year, and can be automatically renewed and paid at the Ministry of Human Resources and Emiratisation’s demand, without any other restrictions.

The second option entails a 30-month insurance policy, at a value of Dh137.50 for each skilled worker, Dh180 for each low-skilled worker and Dh250 for each worker paid by high-risk establishments that are not registered with the Wages Protection System (WPS).

The insurance coverage amounts to up to Dh20,000 and includes the wages of the worker’s last 120 working days, the end-of-service gratuity, the expenses of returning the worker to their home country, and in the event of the worker’s death, the costs of repatriating the body to his home country, and other rights and entitlements that the employer is unable to fulfil, based on a decision by the ministry or the concerned labour court.

The employer may only request to reclaim the bank guarantee in any of these four cases: in the event of cancellation of the employee’s work permit and providing proof of their departure from the country; in case of the employee’s death and providing proof of the body’s repatriation or burial in the UAE; if the employee is transferring to a new employer; or any other case in which the employer provides proof of cancellation of the employee’s work permit and payment of entitlements due to the employee.

The Ministry of Human Resources and Emiratisation reserves the right to refuse to reimburse the bank guarantee to the employer if the employer is a party to a collective labour dispute until the employee’s entitlements are settled; or if evidence of due fines against the establishment is proven, or if the establishment’s work permits have been suspended. ICA/Expat Media

For all the latest news from the UAE and the world, follow us on Facebook, Twitter and Instagram and subscribe to our YouTube page


ADVERTISE HERE Find or post new jobs, motor ads and classifieds

Explore Expat Media