UAE unemployment Insurance Scheme Comes in Force

UAE Unemployment Insurance Scheme Comes into Force

UAE Provides Coherent Social Security Policy providing a sustainable future for Emiratis and Resident Employees

The UAE’s Ministry of Human Resources and Emiratisation announced on Tuesday that an Unemployment Insurance Scheme for employees of the federal government and the private sector has come into force.

The Decree-Law on Unemployment Insurance Scheme stipulates that the insured will be compensated with a cash amount for a specified period of time if they lose their job until they find another employment opportunity, which is subject to terms and conditions.

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,” the ministry said. “It aims to enhance the competitiveness of UAE nationals, boost the attractiveness of the UAE’s job market to attract both international and national talents - building a competitive knowledgebased economy that is among the best globally.” Compensation will be paid monthly, calculated at 60 percent of the employee’s subscription salary and subject to a maximum of AED20,000 per month, for a period of no more than three months from the date of their unemployment. Dr Abdulrahman Al Awar, Minister of Human Resources and Emiratisation, said: “The decree reflects the UAE government’s approach in 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 show the preference of people from all over the world 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.” This contributes to enhancing the stability and prosperity of society, which is among the top priorities of our wise leadership.”

Terms and Conditions

The terms and conditions of the new law apply to all employees in the federal government and the private sector in the UAE, excluding investors, domestic helpers, part-time employees, juveniles under the age of 18, and retirees. To be eligible for compensation, employees must have been insured for no less than 12 continuous months, and should not have been dismissed from work.. Furthermore, the compensation claim should not be through fraud or deception and penalties shall apply to both the employer and the insured. The insured may agree on additional benefits with the service providers – the insurance companies licensed by Central Bank of the UAE and fulfil the conditions for providing unemployment insurance, which are issued by the UAE Cabinet after consulting with the Central Bank of the UAE. 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 to under this Decree-Law shall not influence any other compensation or entitlements outlined under any other legislation in force in the UAE