Salary deduction, no new work permit: 4 things UAE employees need to know about job loss insurance fines

With one day left to subscribe for the scheme, here are some important reminders

Published: Fri 29 Sep 2023, 3:52 PM

Updated: Fri 29 Sep 2023, 10:45 PM

By
Web Desk

The deadline to register for UAE's job loss insurance scheme has come close, with one day left for employees to apply for the scheme.

Employees must sign up prior to October 1, the deadline announced for registering to the job safety scheme. Those who forget to do so are at the risk of paying a fine and facing other penalties.

The scheme is a low-cost and easy way for employees to have financial support for a certain period in the case of job loss.

From penalties to exceptions, here's all you need to know about the job loss insurance scheme.

Fines

A Dh400 fine will be imposed on eligible employees who do not sign up for the scheme before the deadline.

A Dh200 fine will be taken from employees who do not pay premiums for more than three months from the due date after subscribing.

For employees who are caught taking insurance benefits of the scheme from others, a hefty fine of Dh20,000 will be imposed.

Salary deduction

It is important to remember that employees who don't sign up for the scheme will face fines and penalties, and not the employers.

Unpaid penalties shall be deducted either from the employees' salary or end-of-service benefits, according to the Ministry of Human Resources.

No new work permit

Employees who fail to pay all their pending fines in regard to the insurance scheme, will not be allowed to apply for a new work permit until they have cleared them.

Exceptions

There are exceptions to those applying to the scheme.

These include investors, business owners, domestic workers, temporary employees, minors under the age of 18, and retirees who receive pension and have joined a new employer.

All federal and private employees excluding the above mentioned are obliged to register to to the scheme and will face penalty upon violations.

The unemployment insurance scheme is divided into two categories:

Those with a salary of Dh16,000 and under, have their insurance premium set at Dh5 per month, with the maximum monthly compensation being Dh10,000.

Employees who's salary exceeds Dh16,000 have their insurance premium set at Dh10 per month and monthly compensation capped at Dh20,000.

It is important to note that the compensation can be claimed as long as the beneficiary has been subscribed to the scheme for at least 12 consecutive months.

In case he/she cancels their residency visa and leaves the country or gets a new job, they will not be eligible for compensation.

The compensation is calculated at the rate of 60 per cent of the average basic salary in the six months before unemployment and paid for a maximum of three months for each claim. The employee in question must not have been terminated for disciplinary reasons or resigned.

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