UAE: Employers must provide insurance coverage of up to Dh20,000

Employers in the UAE are obligated to provide insurance coverage of up to Dh20,000 for every worker to protect them in the event of a company’s bankruptcy or failure to pay the workers’ benefits, according to authorities.

The UAE’s Government Portal has clarified on its website that instead of keeping a bank guarantee of Dh3,000 with the Ministry of Human Resources and Emiratisation (Mohre), employers can opt to buy insurance for workers.

“Called Taa-meen, the insurance will provide a maximum insurance coverage of Dh20,000 to every worker and protect them from the company’s bankruptcy or failure to get their legitimate dues. In case the insurance company pays the worker, the employer will have to repay the same to the insurance company,” said authorities.

On October 15, 2018, the Mohre implemented the current insurance policy for workers. The insurance policy, called Taa-meen, was approved by the UAE Cabinet in June 2018 and it is intended to be an alternative option for employers keeping a bank guarantee of Dh3,000 while recruiting a new worker.

Bank guarantee and workers’ protection insurance scheme

According to Ministerial Resolution No. 318 of 2022 Concerning Bank Guarantees and Employees Protection Insurance Scheme (PDF, 461 KB), establishments may choose one of the following two options for the workers:

1- Procure a bank guarantee, duly issued from a bank operating in the UAE. The bank guarantee must not be less than Dh3,000 for each worker, valid for one year form its issue date, renewable automatically and paid upon Mohre’s request, without any restrictions.

2- Buy an insurance policy for the worker.

Cost of the new insurance policy

An insurance policy’s costs depend on the product as shown below:

Insurance premium (for each certificate/transaction)

>>Skilled labour- Dh137.50

>>Low-skilled labour- Dh180

>>High-risk establishments, not compliant with the wages protection system- Dh250

>>Domestic workers- Dh105

The employer can purchase an insurance policy form the ‘Insurance pool’, which is valid for 30 months.

The insurance scheme protects the benefits and rights of the private sector workers and domestic helpers.

How does the new insurance policy work?

The policy works on workers currently in service, according to authorities.

“For workers who are already secured under the bank guarantee of Dh3,000, the employer has the option to either change them into the new insurance system or keep them under the old bank guarantee system. However, the employer can shift current workers under the new insurance system only after renewing their permits, not before,” officials explained on the government portal.

Coverage and limit of the policy

In case of a company’s bankruptcy or failure to pay the workers’ benefits, the new policy will provide a maximum insurance coverage of Dh20,000 per worker. It will cover any labour entitlements mentioned in Federal Decree Law No. 33 of 2021 Regarding the Regulation of Employment Relationship, as amended and its Executive Regulations. It will also cover domestic labour entitlements, provided for in Federal Law No. 10 of 2017 on Domestic Workers, as amended and the resolutions issued for its execution.

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