The UAE will deduct fines for not subscribing to the mandatory Unemployment Insurance Scheme direct from the salaries or end-of-term gratuity of violators, said the Ministry of Human Resources and Emiratisation (MoHRE).
More than 6.6m people are subscribed to the UAE Unemployment Insurance Scheme as of November 15, the Ministry of Human Resources and Emiratisation (MoHRE) announced.
However, people not yet subscribed face fines of AED400 ($109) the ministry said, with further fines also lined up for people who fail to pay subscription fees.
UAE Unemployment Insurance fines
The UAE’s MoHRE said: “The rising number of subscribers reflects the success of the scheme and the high awareness of the insured.”
The scheme, which came into effect on January 1, ensures a social protection for all workers, both citizens and residents, in the federal government and private sectors, as it provides three-month compensation amounts for the insured in the case of unemployment and until they find a job.
The deadline for enrolling in the Unemployment Insurance Scheme had expired in October, and non-subscribers are required pay a AED400 fine, in accordance with Cabinet Resolution 97 for 2022 on regulations and mechanisms of the Unemployment Insurance Scheme.
The rules also stipulate a AED200 fine facing subscribers who are not complied with paying scheduled subscription fees.
The Ministry announced in June 2023 the postponement of imposing fines on non-subscribers from July 1 to October1 to give more time to those included to subscribe.
It said: “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”.
Unsubscribed workers in the UAE can check the amount of the fines they have incurred and make payments through the MoHRE smart application, its website, or by visiting one of the authorised business service centres.
Digital channels also offer the option to submit requests to allow for fines to be paid in instalments, aiming to reduce burden on customers.
The Ministry accepts appeals for exemption from fines if all supporting documents are provided, and the decisions on appeals are made within 15 working days of submission through the MoHRE official channels.
The MoHRE said: “We call on subscribers to comply with the agreed upon payment schedule and pay their insurance fees on time.
“Non-payment on time results in a AED200 fine as well as the cancellation of the insurance policy.”
Employees in private sector establishments who have issued their work permits after October 1 must subscribe to the Unemployment Insurance Scheme within four months, the Ministry said.
Anybody who fails to enrol within the specified period will incur a AED400 fine.
Certain groups are exempt from registering in the Unemployment Insurance Scheme, including:
- Investors (business owners who own and manage their establishments)
- Domestic workers
- Temporary employees
- Juveniles under the age of 18
- Citizens who are eligible for retirement
- Retirees who receive pension and have joined a new employer
Subscription can be proceeded by visiting the Involuntary Loss of Employment (ILOE) Insurance Pool website, the ILOE smartphone application, designated physical self-service kiosks, ATMs, business service centres, exchange companies (such as Al Ansari Exchange), banking applications, telecom companies’ bills, and SMS.
UAE Unemployment Insurance Scheme is divided into two categories:
- The first covers those with a basic salary of AED16,000 or below, where the insurance premium for the insured employee in this category is set at AED5 per month (AED60 annually), and the maximum monthly compensation is set at AED10,000
- The second category includes those with a basic salary exceeding AED16,000, where the insurance premium is AED10 per month (AED120 annually). The monthly compensation for this category is capped at AED20,000
The insurance compensation can be claimed as long as the insured (employee) has been subscribed to the UAE Unemployment Insurance Scheme for at least 12 consecutive months.
The insured’s right to compensation is forfeited if he/she leaves the country or joins a new job.
The claim to compensation is processed within two weeks of submission.
The compensation is paid for a maximum of three months from the date of unemployment in the UAE, provided the employee in question was not terminated for disciplinary reasons, and has not voluntarily resigned.
The compensation amount is calculated at the rate of 60 per cent of the average basic salary in the last six months before unemployment.
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