Unemployment insurance: UAE gets tough with fines, work permit bans

Workers who have failed to register for the UAE’s Unemployment Insurance Scheme will be receiving fines, says the Ministry of Human Resources and Emiratisation (MoHRE).

The MoHRE also said it has started fining workers who fail to pay their periodic installments as per the payment schedule that they selected upon registration.

In a previous note, the ministry revealed that over 6.7 million workers had registered in the Unemployment Insurance Scheme, including citizens and residents working in the federal government and the private sector.

“The financial penalties that were implemented affected approximately 14% of all workers, the group that had failed to register in the system,” said the Ministry in a statement. 

“Workers who fail to subscribe to the system face a Dhs400 fine, while those who do not meet their regular payment obligations incur a fine of Dhs200.”

The ministry is urging workers to pay their fines promptly in order to avoid administrative measures that will be taken against non-compliant individuals, including being denied new work permits.

The ministry has also warned that outstanding fines will be deducted from an employee’s salary or end-of-service benefits.

Security net

The new unemployment insurance system is set to provide UAE workers with financial compensation for up to three months following loss of employment, while they try to secure a new job opportunity.

Insurance compensation can be claimed as long as workers have been subscribed to the Unemployment Insurance Scheme for at least 12 consecutive months. The insured’s right to compensation is forfeited in the event that they cancel their residency and leave the country or join a new job, within the processing period. The claim will be processed within two weeks of submission.

The ministry says that subscription to the system can be completed by visiting the Involuntary Loss of Employment (ILOE) Insurance Pool website (www.iloe.ae), by using the ILOE smartphone application, designated physical self-service kiosks, ATMs, business service centres, exchange companies, banking applications, SMS text messages, telecom companies’ bills, or the ILOE call centre on 600599555.

“The Unemployment Insurance Scheme is divided into two categories: the first covering those with a basic salary of Dhs16,000 and under, where the insurance premium for the insured employee in this category is set at Dhs5 per month (Dhs60 annually), and the maximum monthly compensation is set at Dhs10,000,” says the ministry.

“Meanwhile, the second category includes those with a basic salary exceeding AED16,000, where the insurance premium is Dhs10 per month (Dhs120 annually). The monthly compensation for this category is capped at Dhs20,000,” the ministry notes.