Unemployment regulations for the new year

Unemployment regulations for the new year

If you are an employed in the UAE, then this article is an important read.

A new mandatory unemployment insurance scheme has been launched which is low-cost, gives you a financial cushion if you lose your job and has a mandatory registration process and deadline that you will need to action.

Register before 30 June 2023 to be eligible for unemployment insurance, and avoid the late registration penalty.

First, check if this applies to you.

If you are over 18 and employed on the mainland, then it applies to you.

Free zone employees, investors, domestic workers, contractual workers (temporary) and retirees are excluded and are not eligible to register.

What is it?

A new form of insurance that you pay on your own behalf to receive financial support in case you lose your job and there was no dispute with your employer.

You will receive 60% of your basic salary for up to 3 months, subject to a limit of AED 20,000 in total compensation.

You can claim if you have been contributing for a consecutive 12 month period, lost your job and did not find alternative employment.

What does it cost?

The current rate has been fixed at AED 60 per annum and is paid to an approved insurance company.

Is this optional?

No, all relevant employees are obliged to register and face a personal fine of up to AED 400 if they fail to register by 30 June 2023.

As per the Ministerial Resolution No. 604 of 2022 regarding the Involuntary Loss of Employment (ILOE) , the eligible employees have a grace period of 6 months (till 30June 2023) to subscribe in the ILOE. Also please note that if the insured/worker was employed at a date later than Jan 01st, 2023, he will have a grace period of 4 months to subscribe , starting from the day he landed in the UAE or Visa Change Status.

Whilst your employer may assist you with information, this insurance is personal to you and your employer cannot apply on your behalf.

Where can i find out more?

You can visit MOHRE's official site for up to date information and ILOE, the approved insurance scheme website for next steps.

As always, please reach out to us for any assistance you may need.