UAE employees must enroll in the new unemployment insurance program.

The Ministry of Human Resources and Emiratization announced that as of January 1, 2023, employees of the federal government and the private sector must enroll in the UAE’s new social security support program. The social security support program, which was introduced in May, offers Emiratis and residents a much-needed financial safety net by providing a cash payment for three months if they lose their jobs.

According to the ministry at the time, the approach will lessen corporate risks while ensuring that Emiratis and residents may maintain a respectable standard of living while they are unemployed.

If an employee has worked and paid into the insurance program for at least 12 months and has not been fired for misconduct or resignation, they are eligible for the unemployment payment. However, if a covered employee leaves the nation or begins a new employment, they are not eligible for the reimbursement.

Investors who own the businesses where they work, domestic assistants, part-time employees, those under the age of 18, and retirees who receive a pension but have started a new employment are not covered by the insurance program. Therefore, it is not required for everyone who works in the UAE.

The agreement, which was reached with nine local insurance companies, establishes the framework for the Unemployment Insurance Scheme, disclosed additional information on the program, including its cost and the fact that employees are responsible for covering it.

According to the ministry, compensation will be granted for a maximum of three months following the date of an employee’s job loss and will be computed at 60% of their basic income, with a monthly maximum payment of Dh20,000 ($5,445).

However, two categories contribute the insurance program.

1-Employees who receive a monthly annual wage of Dh16,000 or less fall under the first category.

2-Employees who receive a monthly annual wage of Dh16,000 or higher fall into the second category.
-For workers making an annual salary of Dh16,000 or less, the insurance fee is Dh5 per month, or Dh60 a year.
-Employees who make at least Dh16,000 a month in annual salary will pay Dh10 per month, or Dh120 annually.

The cost of unemployment insurance will be covered by the employee. According to the ministry, this can be paid either monthly, quarterly, half-yearly, or annually. The insurance policy’s cost is also subject to VAT.

According to the unemployment insurance scheme, the unemployment compensation will rely on the monthly basic salary. The amount of the monthly cash payment, however, would not go over Dh10,000 for employees in the first category and Dh20,000 for those in the second category. The ministry stated that it will be computed at a rate of 60% of the base income. For instance, if your basic monthly pay is Dh10,000 and you lose your job, you will receive 60% of that amount for three months, or Dh6,000.

When an insured employee loses their work, they have 30 days from the date of their unemployment to file a claim through one of three authorized claim channels: the insurance pool’s e-portal, smart application, or call center.

As previously noted, as of January 1, 2023, all employee of the federal government and the private sector must enroll in the new social security support program.

Our firm, Mouannes International Service, is willing to help you if you have any concerns about enrolling into the new unemployment insurance program or how it can affect you. For more information, please get in touch with us. Tel: 04 381 2021

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