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UAE jobs: Unemployment insurance scheme comes into force

Those insured against job loss will be compensated with a cash amount for a specified period of time

The UAE’s unemployment insurance scheme for staff of federal government and private sector entities has come into force. Those insured against job loss will be compensated with a cash amount for a specified period of time until they find another employment opportunity subject to some terms and conditions.

The compensation will be paid monthly, calculated at 60 per cent of the employee’s subscription salary and subject to a maximum of Dh20,000 per month, for a period of no more than three months from the date of unemployment.

According to the Ministry of Human Resources and Emiratisation (Mohre), the scheme applies to all employees, except investors (owners of the establishments in which they work), domestic helpers, part-time employees, juveniles under the age of 18, and retirees who receive a retirement pension and have joined a new job.

To be eligible for compensation, the employee must have been insured for no less than 12 continuous months, calculated from the date of subscription in the insurance system. In addition, the beneficiary shall not have been dismissed from their work for disciplinary reasons. The compensation claim should not be made through fraud or deception. If it is found that the establishment in which the employee works is not real, penalties shall apply.

The compensation shall end once the employee joins another job.

The insured may agree on additional benefits with the service providers – the insurance companies licensed by Central Bank of the UAE. 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 the scheme shall not influence any other entitlements outlined under other legislation in force in the UAE.

The new system is 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 Mohre said.

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.”

He added: “The UAE prioritises preserving human dignity, and this decree enhances the legislative environment to safeguard the rights of all employees in the country — Emiratis and residents alike — and provides them with the best means of care at all levels. This contributes to enhancing the stability and prosperity of society, which is among the top priorities of our wise leadership.”

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