Understanding the UAE’s Mandatory Unemployment Insurance Scheme: Key Points and Eligibility

The UAE is set to introduce a mandatory unemployment insurance scheme from January 1, 2023. This initiative aims to provide social protection and attract and retain talent in the labor market. This article outlines the key aspects of the insurance scheme, including eligibility, compliance requirements, and penalties for non-compliance.

Introduction to the Unemployment Insurance Scheme

The Minister of Human Resources and Emiratisation (MoHRE) announced the launch of the mandatory unemployment insurance scheme in May 2022. The scheme is scheduled to come into effect from January 1, 2023, with the objective of providing financial support to workers who lose their jobs involuntarily by terminating their employment contracts.

Scope and Coverage

The unemployment insurance scheme will be mandatory for all UAE nationals and expatriate workers in both the private and public sectors, with the following exceptions:

InvestorsDomestic workersA contractual or temporary basis workersRetirees who have joined a new employerNon-working dependents of retireesIndividuals under the age of 18Employees of Free Zone companies

The scheme aims to address the challenges of unemployment and provide a safety net for workers during periods of job loss.

Registration and Compliance

Emirati and resident employees are required to participate in the mandatory unemployment insurance scheme. To facilitate compliance, the Unemployment Insurance Law stipulates a six-month grace period until December 31, 2023, for all eligible employees to subscribe to the scheme. By this date, they must have registered for it unless they fall under the exempt categories mentioned above.

Contributions to the scheme will be made by employees and are payable on a monthly basis. Non-compliance with the scheme requirements can lead to severe consequences, including financial penalties and potential impact on work permit eligibility.

Penalties and Consequences of Non-Compliance

Employees who fail to comply with the scheme requirements or do not pay the premiums on time may face significant penalties. These penalties include:

AED 400 for failure to subscribe to the schemeAED 200 for failure to pay premiums for more than three months

These penalties can be deducted from various sources, including salary accounts and end-of-service benefits. Failure to comply with the scheme can also result in the disqualification of unemployment insurance benefits.

Processing and Assistance

For individuals who need assistance with registering for the Unemployment Insurance Scheme, we offer prompt and professional services. Our team can help you navigate the registration process and ensure compliance with all requirements. Our contact number is 971 52 234 9609, and we are available via WhatsApp to assist you right away.

Just send us a message via WhatsApp, and we will process your insurance request promptly. We are committed to helping you stay compliant and navigate the complexities of the new insurance scheme.