United Arab Emirates: Stricter Calculation of Emiratization Target Implemented

The Ministry of Human Resources and Emiratization announced that private sector companies with 50 or more employees must increase their Emiratization rate in skilled occupations by 1% every six months to reach a total of 2% growth by the end of each year. The UAE cabinet had already implemented the 2% annual Emiratization target in May 2022. The goal is for these companies to have at least 10% of their workforce comprised of Emirati citizens by 2026 and the new calculation is intended to encourage companies to hire and retain these Emirati citizens throughout the year. Companies that do not comply will be subject to a penalty of AED 7,000 per month for each vacancy that has not been filled with an Emirati worker; the penalty will now be collected semi-annually, instead of annually. The monthly penalty will increase by AED 1,000 each year. Penalties will begin being applied on July 1, 2023 for companies that do not comply by June 30, 2023 and will include penalty fees owed from the annual requirements implemented in 2022. Affected employers should correct their Emiratization rate and comply with the new requirement by the end of June 2023 to avoid monthly fines; they should also register with the UAE government partnership program, “Nafis”, and consider the initiatives in place to support companies seeking eligible Emirati citizen job candidates.