ABU DHABI, UAE – Some employees who failed to meet an October 1 deadline to sign up to the UAE’s job loss insurance scheme will not be able to renew work visas until they pay off fines, authorities said on Wednesday.
The Ministry of Human Resources and Emiratization said financial penalties would be deducted from salaries or end-of-service gratuities as part of “administrative measures” in place,
Workers were previously told they would face fines of Dh400 if they did not register by the deadline.
An additional Dh200 penalty is imposed on those who don’t pay insurance premiums within three months of the due date.
Subscribers to the unemployment insurance scheme can make a single payment to cover the year’s subscription or quarterly or monthly payments.
The ministry issued the warning as it announced that more than 6.6 million people have registered with the flagship social security scheme, which was launched in January.
The policy aims to provide a vital safety net for workers in the public and private sector if they lose their job.
“Administrative measures will be taken against those who fail to pay fines, including not granting them new work permits until fines are paid, as well as deducting the fine amount from their salaries or end-of-service gratuities,” the ministry said in a statement.
Scheme is optional for some workers
The program is optional for those working in free zones, the ministry has previously confirmed to The National.
Workers who start new jobs in the UAE will have a four-month grace period to sign up for unemployment insurance.
Under Federal Decree Law No (13) of 2022 regarding unemployment insurance, it is mandatory for employees in the private sector and the federal government to register on the scheme.
Registration is optional for employees in semi-government and local government bodies.
Responsibility for registration rests with each employee, but employers can register their staff.
“The rising number of subscribers reflect the success of the scheme and the high awareness of the insured,” the ministry said in a statement.
How does the insurance programme work?
Employees and employers can subscribe by visiting the Involuntary Loss of Employment Insurance Pool website (www.iloe.ae), the ILOE smartphone application, designated kiosks, business service centres, exchange companies such as Al Ansari Exchange, and banks’ smartphone applications.
Insurance compensation can be claimed if the employee has subscribed to the Unemployment Insurance Scheme for at least 12 consecutive months.
People lose their right to compensation if they cancel their residency and leave the country or join a new job within the processing period.
The claim will be processed within two weeks of submission.
The compensation is calculated at 60 per cent of average basic salary in the six months before unemployment.
Each claim is paid for a maximum of three months from the date of unemployment, provided the employee was not terminated for disciplinary reasons or has not voluntarily resigned.