Unemployment insurance scheme amended in the UAE
The United Arab Emirates has extended the grace period during which workers can sign up to the unemployment insurance scheme.
Previously scheduled to start levying fines on non-subscribers as early as 1 July, it is now possible to sign up until 1 October 2023. It is after this date that fines of AED 400 per person will begin to be levied
The deadline was changed after 4.6 million workers signed up for the scheme. Under the current rules, it is the responsibility of the employee, not the employer, to subscribe to the scheme. Subscription costs from AED 5 per month plus VAT.
Under the new unemployment insurance scheme, UAE nationals and residents are entitled to cash compensation payments within three months of losing their source of income. The Ministry of Human Resources and Emiratisation has urged everyone to subscribe: on the ministry’s website, in the iloe smart app, via ATMs or Al Ansari Exchange kiosks.
All those who are temporarily unemployed will be compensated until they are reemployed, subject to a number of conditions. For example, the monthly compensation will be 60% of the employee’s salary, but no more than AED 20,000 per month.
The scheme applies to all workers except investors and company owners, domestic workers, part-time workers, minors under the age of 18 and pensioners receiving an old-age pension.
To qualify for compensation, an employee must have been insured under the scheme for at least 12 consecutive months. In addition, the scheme does not cover those dismissed for disciplinary reasons.
If an employee decides to resort to fraud such as applying for compensation by submitting information about dismissal from a non-existent company, they will be fined. Compensation is discontinued when the person takes up a new job.
Those claiming insurance benefits must be in the UAE legally. The loss of employment cannot be the result of war, riot, insurrection, revolution, invasion or other unrest.
Loss of employment due to a nuclear accident, radioactive, toxic release or explosion of similar equipment, terrorist attack involving biological or chemical weapons, nationalisation of a company and expropriation of its property by UAE authorities, or other force majeure circumstances are also not covered.
Source: Khaleej Times
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