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UAE’s mandatory unemployment insurance: Dh200 to Dh400 fine to be deducted from salary

Employees in the UAE who have not subscribed to the mandatory unemployment insurance will be fined Dh400 that will be deducted from their salary or gratuity, according to the Ministry of Human Resources and Emiratisation (MOHRE).

As of November 15, more than 6.6 million people have already subscribed to the Unemployment Insurance Scheme, which provides cash compensation for up to three months to subscribers who lose their jobs.

Those who failed to meet the October 1 deadline for subscription to the Unemployment Insurance Scheme will be fined Dh400, while those who subscribed but failed to pay their monthly fees on time will be fined Dh200.

“Administrative measures will be taken against those who fail to pay fines, including not granting them new work permits until fines are paid, as well as deducting the fine amount from their salaries or end-of-service gratuities,” according to MOHRE.

“We call on subscribers to comply with the agreed-upon payment schedule and pay their insurance fees on time,” according to MOHRE, “Non-payment on time results in an Dh200 fine as well as the cancellation of the insurance policy.”

Employees can check for fines and make payments through the MOHRE app or website, or through any of the authorised business service centres. Employees can also appeal for an exemption from fines through MOHRE’s official channels.

Employees who had their work permits issued after October 1 are given four months to subscribe to the Unemployment Insurance Scheme to avoid a fine.

How to subscribe?

Subscription can be done through the Involuntary Loss of Employment (ILOE) Insurance Pool website, the ILOE app, ATMs, money exchange companies, and banking apps.

Who are exempted?

Individuals who are exempted from the Unemployment Insurance Scheme include investors and business owners, domestic workers, temporary employees, juveniles under the age of 18, citizens who are eligible for retirement, and retirees who receive pension and have joined a new employer.

How much is the unemployment insurance?

Those with a basic salary of Dh16,000 or below can get the insurance premium at Dh5 per month (Dh60 per year), while those earning above Dh16,000 can get the insurance premium at Dh10 per month or Dh120 per year. Employees must bear the cost of the insurance.

What is the benefit of unemployment insurance?

In case the insured person loses his or her job, he or she is entitled to receive cash compensation for up to three months. Those paying insurance premium of Dh60 per year can get maximum monthly compensation of Dh10,000. Those paying an insurance premium of Dh120 per year can get maximum monthly compensation of Dh20,000. The compensation amount is calculated at the rate of 60 percent of the average basic salary in the last six months before unemployment. The claim is processed within two weeks of submitting a claim.

Disqualification of unemployment insurance claim

The insured person will be disqualified for insurance claim if he or she lost the job due to disciplinary reasons, voluntarily resigned, left the country, joined a new job or have not made an insurance payment for at least 12 consecutive months. ICA/Expat Media

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