Internationally there is a preference to move and settle in the UAE due to the advantages of security, safety, benefits, education, health, and general quality of life. The newly implemented Unemployment Insurance Scheme (UIS) only furthers the attractions and benefits that the UAE has on offer.
The following interview that Economy Middle East held with Nazar Musa, CEO of PRO Partner Group, a prominent UAE Company Service Provider, discusses the UIS and its conditions in the UAE.
In May, the Minister of Human Resources and Emiratisation (MOHRE) announced that there would be a new federal law covering the scheme coming into effect as of the 11th of October.
What is the unemployment insurance scheme?
The new Unemployment Insurance Scheme (UIS) offers social security and support for Emiratis and residents in the UAE. The scheme will compensate the employee for up to 3 months in the event of losing their job, from the date of their unemployment.
All employees pay into the scheme, but it’s yet to be stipulated by officials how exactly the contributions will be made, whether as deductions from salary or directly through the employer. The initial impressions even indicate that contributions could be from as low as 40 to 100 dirhams per year for the basic cover. However, employees may opt for a higher tier once the policy has been finalized.
Who is eligible for the unemployment insurance scheme?
The scheme will cover both Emirati and foreign employees in the public and private sectors, including government employees, and is mandatory.
To become eligible for the compensation payment, the employee must have been insured for a minimum of 12 continuous months, which is calculated from the date they first subscribed to the scheme.
There are a few exemptions from the scheme, such as investors (including owners of a place where they work), part-time employees, domestic helpers, workers under 18, and retirees who receive a pension and have joined new work. Each of these is not eligible for the scheme.Â
Additionally, should an employee has been dismissed for disciplinary reasons, they will not be eligible to receive the compensation.
Does a UAE resident/citizen need to register for the unemployment insurance scheme?
Both Emiratis and residents in the UAE are covered by the Unemployment Insurance Scheme, and it is mandatory.
What advantages does the unemployment insurance scheme offer to employers and employees?
The new compensation provides social security and ensures sustainable living for Emiratis and resident employees during their unemployment and reduces the risk for businesses. The scheme enhances the competitiveness and attractiveness of the UAE’s job market for the best talent and contributes towards creating a globally competitive knowledge-based economy. Furthermore, the scheme complements the legislative environment and helps safeguard employee rights in the UAE.
The payments will be made monthly to the employee, from the date of job loss, for a maximum of three months. It is calculated at a rate of 60% of their base salary, with a maximum cap of Dh20,000 per month.
Can a resident under a sponsor’s visa and insurance avail of the scheme if the sponsor leaves the job?
The Unemployment Insurance Scheme is for employees in the UAE and offers them compensation for up to three months, should they themselves become unemployed.
In recent years, several economic, legal, and social reforms have strengthened the UAE’s business environment, increasing Foreign Direct Investment (FDI), attracting skilled talent, and incentivizing businesses to establish or expand operations. This scheme contributes to the continuously prospering corporate environment of the UAE.
