UAE Unemployment Insurance Scheme launched UAE Unemployment Insurance Scheme launched
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UAE Jobs: What you should know about the new Unemployment Insurance Scheme

UAE Jobs: What you should know about the new Unemployment Insurance Scheme

The insured will be compensated with a cash amount for a specific period of time until they find another employment opportunity

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UAE unemployement insurance scheme

The ‘Unemployment Insurance Scheme’ for employees of the UAE’s federal government and private sector was initiated on Tuesday.

Read: UAE’s unemployment benefits scheme applicable to all public and private sector employees

The decree-law on the Unemployment Insurance Scheme states that the insured will be compensated with a cash amount for a specific period of time if they lost their job until they find another employment opportunity, subject to terms and conditions, as reported by the state news agency, WAM.

Dr Abdulrahman Al Awar, Minister of Human Resources and Emiratisation, said, “The decree reflects the UAE government’s approach to developing the business environment and enhancing the UAE’s position as a preferred destination to work and live, which is confirmed by global indices. Reports showed the preference of people worldwide to work and settle in the UAE because of the advantages it provides in terms of security, safety, job benefits, as well as the level of education, health, and quality of life.”

According to the Ministry of Human Resources and Emiratisation, the new system provides a “social security scheme that ensures the sustainability of a decent life for Emiratis and resident employees during their unemployment period, while reducing business risks.”

Key points of the scheme

  • Compensation will be paid monthly, calculated at 60 per cent of the employee’s subscription salary and subject to a maximum of Dhs20,000 per month, for no more than three months from the date of their unemployment.
  • The terms and conditions of the new law apply to all employees in the federal government and the private sector in the UAE, except for investors (owners of the establishments in which they work), domestic helpers, part-time employees, juveniles under the age of 18, and retirees who receive a retirement pension and have joined a new job.
  • The law stipulates that to be eligible for compensation, the employee must have been insured for no less than 12 continuous months, calculated from the date of subscription in the insurance system. In addition, the beneficiary shall not have been dismissed from their work for disciplinary reasons, as outlined in the provisions of the Law on Regulating Labour Relations and the Human Resources Law in the Federal Government and any relevant legislation in force.
  • Furthermore, the compensation claim should not be through fraud or deception. If it is found that the establishment in which the employee works is not real, the penalties stipulated in the Law on Regulating Labour Relations and any other legislation in force in the country shall apply to the establishment as well as the insured.
  • The compensation shall be suspended once the employee joins another job during the compensation period.
  • The insured may agree on additional benefits with the service providers, the insurance companies licensed by Central Bank of the UAE (CBUAE) and fulfil the conditions for providing unemployment insurance, which is issued by the UAE cabinet after consulting with the CBUAE. Also, service providers may include other government entities assigned by the UAE cabinet to provide unemployment insurance services.
  • The compensation to which the insured is entitled under this decree-law shall not influence any other compensation or entitlements outlined under any other legislation in force in the UAE.

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