Picture for illustrative purposes only.
PHOTO BY ARCHIVE
A new Unemployment Insurance Scheme in the UAE will be imposed in 2023, with government and private sector employees required to get the insurance starting January 1.
Update: As of January 3, authorities announced a grace period of six months or until June 30, 2023 for qualified employees to complete their application or face a Dh400 fine.
The Unemployment Insurance Scheme, which is part of the UAE’s Unemployment Insurance Law, aims to provide cash compensation to employees in case they lose their jobs. Here’s all you need to know:
Under the insurance scheme, employees in the private sector and UAE government will be provided with cash compensation for up to three months in the event of job termination for reasons beyond their control.
The insurance scheme is paid by the employee.
Federal government and private sector employees must subscribe to the scheme. Freelance workers may also subscribe to the insurance scheme.
Employees may subscribe to the insurance scheme via the Insurance Pool’s website iloe.ae, smart application, bank ATMs, kiosk machines, business service centres, money exchange companies, du and Etisalat, SMS, or any other channel, which MoHRE may announce at a later date.
For those with a salary of Dh16,000 or less, the monthly compensation is up to Dh10,000. For those earning more than Dh16,000, the monthly compensation is up to Dh20,000. The insurance coverage compensation is calculated on a monthly basis at the rate of 60 percent of the basic salary and for a maximum of three months for each claim from the date of unemployment.
Compensation will be paid within two weeks from the date of the claim and capped at a maximum of three months per claim. Compensation for an employee is eligible if they have worked and subscribed for at least 12 months to the insurance scheme
Those excluded from the insurance scheme include investors – owners of establishments in which he or she works, domestic helpers, employees with a temporary employment contract, juveniles under 18 years of age, and retirees who receive a retirement pension and have joined a new job.
Those earning a basic monthly salary of Dh16,000 or less will pay Dh5 per month (or Dh60 annually). Those earning a basic salary of more than Dh16,000 will pay Dh10 per month (or Dh120 annually). The payment can be made by the employee monthly, quarterly, half-yearly, or on an annual basis. The value of the insurance policy is subject to value-added tax (VAT).
If the insured fails to pay the insurance premiums for more than three months from the due date, the insurance certificate will be canceled, and a penalty of Dh200 will be imposed.
The insured must submit the claim through the three approved claim channels – the insurance pool’s e-portal, the insurance pool’s smart application, and the insurance pool’s call centre. This must be done within 30 days from the date of unemployment.
If an employer colludes with the insured to obtain unemployment insurance benefits, the ministry will impose an administrative fine of Dh20,000 for each case. (Scroll down for more)
– If you haven’t worked for 12 months or subscribed to the insurance scheme for 12 months
– If you left the country
– If you joined a new job
– If the reason for job termination is disciplinary
– If you resigned from your work
You will be fined Dh400 if you don’t have unemployment insurance on or before the June 30, 2023 deadline.
Employees who fail to pay their fines for three months from the due date will have the fine amount deducted from their wages through the Wage Protection System, end-of-service gratuity, or any other alternative method deemed acceptable by the Ministry of Human Resources and Emiratisation. The employee will also not be eligible for a new work permit until all due fines are paid “within the designated term.”
Employees can pay their fines using the MOHRE website, app, or business service centers certified by the ministry. They can also apply for installment payments or a waiver using the same means. ICA/Expat Media
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