UAE Issues Visa Ban Warning Over Job Loss Insurance Fines

In a recent announcement, the Ministry of Human Resources and Emiratisation revealed that employees who missed the October 1 deadline to enroll in the UAE’s job loss insurance scheme could face visa renewal challenges until fines are settled.

The ministry emphasized that financial penalties, deducted from salaries or end-of-service gratuities, are part of the “administrative measures” now in effect. Those who failed to register by the deadline were initially warned of a Dh400 fine, with an additional Dh200 penalty for late payment of insurance premiums within three months.

Subscribers to the unemployment insurance scheme are offered the flexibility of a single payment for the annual subscription or the option for quarterly or monthly payments. The ministry shared this warning alongside the announcement that over 6.6 million people have registered for the social security initiative launched in January. The primary goal of this policy is to establish a crucial safety net for workers in both the public and private sectors in the event of job loss.

According to the ministry, “administrative measures will be taken against those who fail to pay fines,” including the withholding of new work permits until fines are settled, and the deduction of fine amounts from salaries or end-of-service gratuities.

It’s worth noting that the program remains optional for those working in free zones, as confirmed by the ministry. Workers starting new jobs in the UAE are granted a four-month grace period to enroll in unemployment insurance.

However, for employees in the private sector and federal government, registration on the scheme is mandatory under Federal Decree Law No (13) of 2022. Registration is discretionary for employees in semi-government and local government bodies, with responsibility for registration lying with individual employees, although employers have the option to register their staff.

To facilitate subscription, employees and employers can visit the Involuntary Loss of Employment Insurance Pool website (www.iloe.ae), the ILOE smartphone application, designated kiosks, business service centers, exchange companies like Al Ansari Exchange, and various banks’ smartphone applications.

The Unemployment Insurance Scheme is categorized based on basic salary, with the first category covering those with a basic salary of Dh16,000 and under, and the second category encompassing those with a basic salary above Dh16,000. Monthly compensation is capped at Dh10,000 for the first category and Dh20,000 for the second.

Compensation can be claimed after 12 consecutive months of subscription, with processing taking two weeks and calculated at 60% of the average basic salary in the six months preceding unemployment. Each claim is payable for a maximum of three months from the date of unemployment, provided the termination was not for disciplinary reasons or voluntary resignation.

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