UAE Insurance: Mandatory unemployment scheme

Rana Abu Nemeh | 09 Jan 2023 | Middle East perspective

The UAE government is introducing two new insurance schemes for employees in 2022 in an effort to provide greater protection and security for employees. These schemes are the Unemployment Insurance Scheme and the Workers Protection Insurance.

The Unemployment Insurance Scheme is mandatory and has already started; all employees must enroll by 30.06.22 and new employees must enroll within four months of obtaining their work permit.

The cost of the insurance is AED 5 per month for employees earning a basic monthly salary of AED 16,000 or less and AED 10 per month for those earning more.

Employees are responsible for paying and subscribing to the Unemployment Insurance Scheme, but employers are required to encourage and assist their employees in doing so.

There are penalties for non-compliance, including fines and disqualification from the scheme.

Employees can subscribe online through Dubai Insurance and make payments through various channels.

To be eligible for compensation, an insured employee must have been insured for at least 12 continuous months, be involuntarily terminated, and meet certain other conditions. The amount of compensation is based on the employee’s salary and length of service.

With visa rules having changed in the last year to allow for redundant workers to stay on in the UAE whilst they find new work, the scheme fully complements this be providing a degree of income during this interim period, so should be positive for job seekers intending to remain in the UAE.