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UAE Unemployment Insurance Scheme

The Ministry of Human Resources and Emiratisation stated in Federal Decree-Law No. 13 of 2022 that unemployment insurance will be implemented for UAE employees from January 1, 2023.The UAE unemployment insurance scheme came into effect on January 1, 2023. The MOHRE provides 6 months for employees to subscribe to the scheme.Let’s see how this scheme benefits the employees, eligibility, exemptions from the unemployment insurance scheme, penalties, and registration process in this article.

What is an Unemployment Insurance Scheme?

UAE Unemployment Insurance Scheme serves as a crucial financial security measure for employees in both the public and private sectors. It offers protection against the impact of job loss and aims to support employees in sustaining the basic routine of their day-to-day lives. It is well-received by foreigners coming to work in the UAE.

Eligibility Criteria for Receiving UAE Unemployment Insurance Benefits

The scheme enhances cash remuneration to unemployed people who lose their jobs beyond their control. The Ministry of Human Resources and Emiratisation of UAE regularized some eligibility criteria for the Unemployment insurance scheme.

The eligibility criteria for UAE employees are listed below. Let’s check if you are eligible for the unemployment insurance scheme.

1. The employee must have been subscribed to the insurance scheme for at least 12 months before becoming eligible.
2. There is no breakage in the insurance payment for more than 3 months of their insurance payment.
3. Employees who have no backlogs in paying their insurance payments.
4. Employees who proved that the reason for their job is not because of their resignation.
5. Employees who are terminated are not necessarily involved in malpractice or violations of any confidential employer agreements.
6. Employees who submit their application within 30 days of unemployment can claim unemployment insurance.
7. A resident of the United Arab Emirates or legally living in the UAE.
8. Employees are not having any attendance issues in the previous working organization.

Exemptions from Unemployment Insurance Payments

Any actions taken by the government have some exemptions, considering the state of all citizens of the nation. Federal Decree-Law No. 13 of 2022 mentioned some exemptions from paying unemployment insurance in the UAE. The exemptions are discussed below.

1. Investors who work at their own company.
2. Daily wages for domestic workers in the UAE.
3. Employees who worked under temporary contracts in the UAE.
4. Juveniles of the United Arab Emirates of age under 18.
5. Individuals who have retired from their jobs and joined another job.
6. Employees who work in the free zones of UAE.

Firms Affiliated With the MOHRE of UAE for the Unemployment Scheme

As the scheme is proposed for January 1, 2023, the MOHRE provides 6 months for the unemployment insurance scheme’s subscription. It affiliates with some firms to facilitate the subscription process for UAE employees. Eligible employees can avail themselves of the following firms to subscribe to unemployment insurance.

1. Dubai Insurance Company
2. Al Ain Ahlia Insurance Company
3. Abu Dhabi National Insurance Company
4. National General Insurance Company
5. Emirates Insurance Company
6. Orient Insurance
7. Oman Insurance Company
8. Abu Dhabi National Takaful Company
9. Orient UNB Takaful Company

The MOHRE also enables other ways to register with the unemployment insurance plan to ease the process even more, and they are mentioned here.

1. The eligible employee can register via the official ILOE website.
2. Can register Via bank ATMs and kiosk machines
3. Many business service centers are allocated to enhance the registration of unemployment insurance plans.
4. Via money exchange firms
5. Through Du and Etisalat
6. An eligible employee can subscribe to the insurance scheme Via an SMS

Enrollment Process for the UAE Unemployment Insurance Scheme

Eligible individuals can register with the unemployment insurance scheme through the official ILOE portal by following the steps below.

1. Firstly, the individuals have to sign with Emirates ID.
2. Then validate themself with the OTP option.
3. They have to submit their details.
4. After that, the individuals can choose their insurance plans and payment due options. One can pay their insurance monthly, quarterly, half-yearly, or yearly.
5. The corresponding amount will be reflected on the payment page based on your preference in the insurance plan.
6. Now you can pay your insurance due.

Guidelines for Claiming Unemployment Insurance

Individuals who lost their jobs and registered with the unemployment insurance plans of UAE are eligible to claim their unemployment insurance amount. They must make an application within 30 days of their unemployment.

After that, the insurance company takes at least two weeks to process the payment. The insurance providers verify the reason for the unemployment of the individual who seeks the insurance claim. Their details and backgrounds have to be verified by the insurance providers.

After the verification process, the claimed insurance amount is based on the insurance plan opted for by the individual. The insurance amount will be applicable for three months after unemployment or until the individual finds another job, whichever comes first.

MOHRE’s Penalties for Failure to Register with the UAE Unemployment Insurance Plan

Unemployment insurance in the United Arab Emirates became effective on January 1, 2023, and employees must register with the insurance scheme. Individuals who fail to register are subject to a fine of Dh600. If they fail to subscribe to the scheme and do not pay the due for more than three subsequent months, their penalty will be Dh600.

The individuals who fall under exemption categories for this insurance are exempt from these penalties. Other than the exemptions category, they must register and pay the insurance due on time based on their insurance preference to avoid penalties.

Benefits of UAE’s Unemployment Insurance Scheme

To ensure financial stability during the unemployment period of individuals who live in the UAE, the MOHRE initiates and implements the unemployment insurance scheme under Federal Decree-Law No. 13 of 2022. It benefits both public and private sector employees of the nation. The scheme reduces job insecurity among working individuals and stabilizes their basic needs when they lose their jobs, which are out of their control. The UAE’s employees, citizens, and non-citizens can benefit from this scheme.

Conclusion

The unemployment insurance plan in the United Arab Emirates is one of the crucial actions the Ministry of Human Resource and Emiratisation takes. The main motto of this scheme is to support the individual’s basic needs during the first three months of unemployment. It is mandatory for all working individuals with a few exemptions that are regularized under the Federal Decree-Law No. 13 of 2022. As working individuals, everyone must enroll in the unemployment insurance scheme, as it provides financial stability during unemployment beyond their control.

The Ministry of Human Resources and Emiratisation (MOHRE) in the UAE ensures the economic security of people who have lost their jobs for valid reasons. It also provides security for individuals from other countries who work in the UAE. This article provides a brief explanation of the eligibility criteria, individuals who are exempt from registering with the unemployment insurance scheme, and the registration procedures. Additionally, the article mentions the advancement of factoHR’s payroll management system, which helps to streamline the payroll process in the UAE.

Frequently Asked Questions

How Does Unemployment Insurance Work in Dubai?

Many insurance firms in Dubai take over the entire process. They provide insurance for 60 percent of the basic salary of the employees enrolled in the insurance scheme. The insurance providers check the eligibility of the individuals and verify their documents for registering with the insurance scheme. The insurance payment can be paid monthly, quarterly, bi-annually, or yearly based on the preference opted by the individuals during the registration process. Employees can claim the insurance amount after 1 year from their registration date.

Is UAE Unemployment Insurance mandatory?

In the United Arab Emirates, the Ministry of Human Resources and Emiratisation implements the unemployment insurance scheme for its employees. It is mandatory for both public and private employees. Failing to register or pay the insurance due on time is subject to penalties. Other than the exemptions category, all eligible individuals must enroll in UAE unemployment insurance plans.

Who Contributes to Unemployment Insurance in UAE?

Unlike provident fund benefits, unemployment insurance schemes are entirely different. The percentage of amount deduction, eligibility, and registration differs from the provident fund and other employee benefits. The insurance amount is deducted from the employee’s salary based on the insurance due opted by them.

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