UAE Job Loss Insurance: Dh400 Fine for Non-Compliance

Asma Ahmed - | UAE

A Dh400 fine awaits those qualified workers who have not yet registered for the statutory unemployment insurance program, according to a harsh warning from the Ministry of Human Resources and Emiratization (MoHRE).

Employees Face Dh400 Fine for Missing Mandatory Unemployment Insurance Deadline

In light of this, the MoHRE has called on all eligible workers to swiftly enroll in the scheme to evade these financial penalties.

Thus far, nearly 5 million individuals have availed themselves of the low-cost safety net provided by this insurance program, which offers financial support during periods of unemployment. To be eligible for compensation, employees must maintain their subscription for at least 12 consecutive months.

As It's important to note that individuals who cancel their residency or secure new employment forfeit their right to claim benefits. Furthermore, the MoHRE has assured applicants that insurance claims will be processed within two weeks of submission.

Employee Responsibility Emphasized

While employers do have the option to register their workforce for the scheme, it is essential to understand that it is the responsibility of individual employees to ensure they are properly enrolled. This scheme extends to all private and federal sector workers, encompassing both Emirati citizens and residents alike.

The only exceptions are investors (business owners who directly manage their enterprises), domestic workers, temporary employees, minors under 18 years old, and retirees who draw pensions and subsequently embark on new employment journeys.

Multiple Registration Channels

To facilitate the enrollment process, the MoHRE has made several avenues available, including the Involuntary Loss of Employment (ILOE) insurance pool website, the ILOE app, kiosks, business service centers, exchange companies (like Al Ansari), and various banking applications.

Structured Insurance Framework

The insurance program is categorized into two tiers. The first tier encompasses employees with a basic salary of Dh16,000 or lower, requiring a modest monthly premium of Dh5, with a maximum monthly compensation of Dh10,000. The second tier, targeting those with a basic salary exceeding Dh16,000, mandates a Dh10 monthly premium, with a maximum monthly compensation cap of Dh20,000.

Penalties for Non-Compliance

Individuals who register for the scheme but neglect to pay their premiums for more than three consecutive months beyond the due date will face insurance certificate cancellation and a Dh200 penalty.

Calculation of Benefits

Compensation is calculated at a rate of 60% of the average basic salary earned during the six months preceding unemployment. Each claim allows for a maximum duration of three months. Importantly, eligibility for benefits is contingent upon no termination due to disciplinary reasons or resignation.

In light of these regulations, it is strongly recommended that eligible employees expedite their enrollment in the unemployment insurance scheme to secure their financial well-being and avert potential penalties ahead of the October 1 deadline.

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Asma Ahmed
Asma Ahmed
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