From January 1, 2023, federal employees and private sector workers will be able to subscribe to the new Unemployment Insurance Scheme.
Human Resources and Emiratisation (MoHRE) divides the insurance scheme into two categories. The first covers those with a basic salary of Dh16,000 and less. The premium for the insured employee in this category is set at Dh5 per month (or Dh60 annually).
Individuals with a basic salary exceeding Dh16,000 fall into the second category. In this case, the insurance premium is Dh10 per month (or Dh120 annually). The payment can be made by the employees monthly, quarterly, half-yearly, or on an annual basis. The value of the insurance policy is subject to value-added tax (VAT).
The scheme's premiums are to be paid by the employees themselves, so firms don't have to incur additional expenses.
A group of nine local insurance companies signed an agreement with the MoHRE to launch the new scheme's framework.
Compensation calculation and claim
Employees who lose their jobs due to "reasons beyond their control" can receive cash compensation for up to three months for each claim.
For the first category, the monthly compensation will not exceed Dh10,000 and for the second category, it will not exceed Dh20,000. The insurance coverage compensation is calculated on a monthly basis at the rate of 60 per cent of the basic salary.
A claim must be submitted via the three approved channels: the insurance pool's e-portal, smart application, or call center, within 30 days of the date of unemployment.
The compensation will be paid within two weeks of the date of the claim and capped at three months. Employees are eligible for the payout if they have worked and subscribed to the insurance scheme for at least 12 months. They must not have been dismissed for a disciplinary reason.
If an employee leaves the country or joins another company, they are not eligible for compensation.
Investors, owners of establishments in which they work, domestic helpers, employees with temporary contracts, juveniles under 18 years of age, and retirees who have a retirement pension and have joined a new company are excluded from the scheme.
This scheme is also available to commission-based employees.
Subscription instructions
Employees can join the insurance pool via its website, smart application, bank ATMs, kiosk machines, business service centers, money exchange companies, du and Etisalat, SMS, or any other channel determined by the MoHRE.
Maintaining stability
"We are eager to accelerate the implementation of the unemployment insurance law through this agreement, which outlines the practical details of implementing its provisions on the ground, including employees in both the public and private sectors," said Abdulrahman Al Awar, Minister of Human Resources and Emiratization. This will lead to a highly competitive and attractive labour market while enhancing the stability of the workforce.
According to the new unemployment insurance law, "the government is eager to develop a legislative and legal structure to meet the needs of the national economy."