UAE Workers Fill Be Charged Heavy Fine Without Unemployment Insurance Scheme

The Ministry of Human Resources and Emiratisation (MoHRE) has initiated the collection of financial penalties from workers who failed to register in UAE’s Unemployment Insurance Scheme or did not adhere to the payment schedule they selected upon registration. The legal deadline for enrollment ended in October 2023, allowing eligible workers 10 months to avoid penalties and access the scheme’s benefits.

Approximately 14% of workers faced financial penalties for non-registration, with a Dh400 fine for those failing to subscribe and a Dh200 fine for those not meeting payment obligations. To streamline the payment process, workers subject to fines can pay using the MoHRE smart application, website, or authorized business service centers. Additionally, workers can request fee payment in installment plans through digital channels.

The Ministry emphasized prompt fine payments to avoid administrative measures, including denial of new work permits. Failure to comply could result in the deduction of the fine amount from the employee’s salary or end-of-service benefits.

Over 6.7 million workers, including citizens and residents in the federal government and private sector, have registered in the Unemployment Insurance Scheme. Exemptions apply to investors, domestic workers, employees with temporary work permits, juveniles under 18, and retirees receiving pensions who have joined a new employer.

The Unemployment Insurance Scheme offers social security, providing financial compensation for up to three months following job loss, enabling insured workers to maintain a decent lifestyle while securing new employment.

Private-sector employees who received work permits after October 1, 2023, must register within four months to avoid a Dh400 fine. Registration is possible through various channels, including the Involuntary Loss of Employment (ILOE) Insurance Pool website, smartphone application, kiosks, ATMs, business service centers, exchange companies, banking applications, SMS, telecom bills, or the ILOE call center.

The scheme has two categories based on salary, with different premium rates and compensation caps. For those earning Dh16,000 and under, the monthly premium is Dh5 (Dh60 annually), with a maximum compensation of Dh10,000. For salaries exceeding Dh16,000, the monthly premium is Dh10 (Dh120 annually), with a maximum compensation of Dh20,000. Compensation eligibility requires at least 12 consecutive months of subscription.

Claims can be made for a maximum of three months from the date of unemployment, provided the termination was not for disciplinary reasons, and the employee did not voluntarily resign. Compensation is calculated at 60% of the average basic salary in the last six months before unemployment. Residency cancellation or joining a new job during the processing period forfeits the right to compensation. Claims are processed within two weeks of submission.