The United Arab Emirates (UAE) has made it more stringent for workers to take out UAE unemployment insurance. Those who do not take out insurance will be fined AED 400 and, if the fine is not paid within three months, it will be deducted from their wages through the wage protection system, termination of service, or any other acceptable method determined by the Ministry of Human Resources and Emiratis.
Furthermore, workers who do not pay their fines will not be eligible for a new work permit. UAE unemployment Insurance Scheme subscription is now a mandatory requirement for all employees of federal government departments and private sector companies in the UAE. Employees must subscribe to the scheme before June 30, 2023 or face the aforementioned fine. Employers who collude with their employees to obtain unemployment insurance benefits will be fined AED 20,000 by the ministry.
To be eligible for compensation, employees must have been a member of the Employment Insurance Scheme for at least 12 consecutive months. This means that employees who sign up for the scheme in January 2023 will not be eligible for compensation until January 2024 or later, if they lose their job.
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In order to qualify for compensation, the following conditions must also be met: the insured must be a legal resident with all insurance premiums paid, provide proof that unemployment was due to reasons other than resignation, not have been dismissed for disciplinary reasons, and submit their claim within 30 days. Employees can pay their fines through the Ministry of Human Resources and Emiratis website, app, or at business service centers approved by the ministry. Payment in instalments or rebates can also be requested through designated channels.
It is important for workers in the UAE to be aware of the new rules regarding unemployment insurance. Not only could they face fines if they do not take out insurance, but they could also risk losing their work permit if they do not pay any resulting fines on time. It is therefore advisable for workers to ensure that they are subscribed to the Employment Insurance Scheme before the June 30, 2023 deadline to avoid any potential issues.
It is also worth noting that, in order to be eligible for compensation in case of job loss, employees must have been a member of the scheme for at least 12 consecutive months. This means that they should sign up for the scheme as soon as possible to ensure that they are covered in the event of unemployment.
Employers also have a responsibility in this regard, as they could face fines if they are found to be colluding with their employees to obtain unemployment insurance benefits. It is therefore important for employers to ensure that they are following the rules and regulations set out by the ministry.
Overall, the new rules regarding unemployment insurance in the UAE are designed to protect both workers and employers. By following the guidelines set out by the ministry, both parties can ensure that they are protected in the event of job loss.