Since its implementation on January 1, over 5.7 million individuals have subscribed to the programme. The Ministry of Human Resources and Emiratisation in the UAE has confirmed that signing up for the unemployment insurance programme is not mandatory for employees in free zones. Previously, it was widely believed that both Emirati and foreign employees, regardless of their work location, were required to subscribe to the scheme. However, a recent message from the ministry on social media platform X clarified that joining the programme is optional for employees in local and semi-government bodies, as well as those working in free zone companies. The ministry stated that the second phase of the system, which will be implemented on May 2, 2023, will allow employees in local government bodies, semi-government entities, and free zones to register on an optional basis using their ID number. This information was confirmed by a ministry official to The National.
According to Federal Decree Law No (13) of 2022 on unemployment insurance, it is obligatory for employees in the private sector and the federal government to enroll in the program. Employees in free zones, semi-government, and local government bodies have the choice to participate in the program, as stated by an official.
The responsibility for registration lies with each individual employee, although the ministry has mentioned that employers have the option to register their staff in the system.
As of last Tuesday, over 5.7 million employees, including citizens and residents working in the private and public sectors, have subscribed to the Unemployment Insurance Scheme since its implementation on January 1. However, investors, business owners who manage their own businesses, domestic workers, temporary employees, individuals under the age of 18, retirees receiving pensions, and those who have recently joined a new employer are excluded from the scheme.
Starting from October 1, a penalty of Dh400 will be imposed on eligible individuals who have not subscribed to the system.
Dr. Abdullah Al Nasser, the chairman of the Araa group advocate and legal consultancy, informed The National that employees who fail to register or do not fulfill their insurance payments will not be eligible for a new work permit. The Emirati lawyer stated, “Article 10 of Ministerial Resolution No. 604 of 2022 regarding unemployment insurance stipulates that the employee will not be granted a new work permit until all outstanding fines are settled.”
Employees who meet the requisite criteria will be subject to a fine of Dh400 if they fail to register in the scheme, in addition to a fine of Dh200 for those who neglect to pay their insurance premiums for more than three months beyond the due date. Subscribers to the scheme are afforded the option of making a single payment to cover the year’s subscription or paying in quarterly and monthly instalments. Dr Al Nasser stated that “the worker’s insurance certificate will also be cancelled due to non-compliance with the payment of insurance premiums.” If the fine remains unsettled three months after the due date, it will be deducted through the wages protection system, end of service benefits, or any other method approved by the Ministry of Human Resources and Emiratisation, as stated on the UAE government website. “The system aims to provide a safety net for citizens and residents, to have a decent life for them and their families until they find a new job,” he said. “The programme will enhance the UAE’s labour market and attract the best global talent.”
The deadline has expired. Mohammad Hamdi, a 40-year-old Egyptian employee in a general trading company in Sharjah, missed the October 1 deadline as he was unaware of the programme. “My employer did not inform me about this programme. My friend called me on September 30 asking if I registered. I know it is my mistake, but I wish there will be another extension of the deadline.” He attempted to register before midnight, but the website was down for several hours. “There was a problem with the website and the payment. I tried many times. At the end I managed to register but it was already October 1 and I don’t know if I will be fined or not,” he said.How does the insurance program operate? Both employees and employers may enroll by accessing the Involuntary Loss of Employment Insurance Pool website (www.iloe.ae), the ILOE smartphone application, designated kiosks, business service centers, exchange companies such as Al Ansari Exchange, and banks’ smartphone applications. The Unemployment Insurance Scheme is bifurcated into two categories. The first category encompasses individuals with a basic salary of Dh16,000 or less, where the insurance premium is fixed at Dh5 per month (Dh60 per annum). The monthly compensation is limited to Dh10,000. The second category comprises individuals with a basic salary exceeding Dh16,000, and the insurance premium is Dh10 per month (Dh120 per annum).
The monthly remuneration for this category is limited to a maximum of Dh20,000.
In order to be eligible for insurance compensation, the employee must have been enrolled in the Unemployment Insurance Scheme for a minimum of 12 consecutive months.
Individuals forfeit their entitlement to compensation if they terminate their residency and depart the country or secure new employment during the processing period.
The claim will undergo processing within a period of two weeks from the date of submission.
The compensation amount is determined by calculating 60 percent of the average basic salary earned during the preceding six months prior to unemployment.
This compensation is disbursed for a maximum duration of three months for each claim, starting from the date of unemployment, provided that the employee’s termination was not due to disciplinary reasons and they did not voluntarily resign.