United Arab Emirates: Unemployment Insurance Scheme Opens and Deadline Extended for Subscription; Guidelines Clarified
January 5, 2023
Emirati and foreign nationals employed in the private and public sector can now subscribe to the United Arab Emirate’s unemployment insurance scheme, referred to as the Involuntary Loss of Employment Scheme, via the Insurance Pool website and other platforms. Furthermore, the Ministry of Human Resources and Emiratization and the Dubai insurance Company clarified that individuals employed in free zones are exempt from the requirement to subscribe to the scheme. The deadline to subscribe to the scheme has been extended as follows: workers employed before December 31, 2022 must subscribe to the scheme by June 30, 2023 and workers employed on or after January 1, 2023 must subscribe to the scheme no more than four months from their date of entry into the United Arab Emirates on an employment entry permit or from an in-country immigration status change. Additionally, insurance premiums will be divided into two categories, depending on an employee’s basic salary: employees with a monthly salary of less than AED 16,000 are required to pay a maximum premium of AED 5 plus Value Added Tax (VAT) per month; and employees with a monthly salary of more than AED 16,000 must pay the maximum premium of AED 10 plus VAT per month. If a basic salary is not specified in the worker’s employment contract, the individual may choose the subscription category. Employees who fail to subscribe to the scheme within the prescribed deadline will be subject to a fine of AED 400 and those who fail to pay the insurance premiums for more than three months from the due date will be subject to a fine of AED 200, their insurance certificate will be canceled and the individual will not be eligible for a new work permit.
This alert is for informational purposes only. If you have any questions, please contact the global immigration professional with whom you work at Fragomen or send an email to [email protected].
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