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From 1st January 2023, UAE will have a new social security programme for unemployed Emiratis and residents. The new scheme, originally announced in May,aims to provide job security to workers and would be mandatory for both federal government and private sector employees. The Ministry of Human Resources and Emiratisation has come up with this programme after signing an agreement with several local insurance companies. The scheme will be beneficial for employers too as they will get a rich talent pool of employees/workers.

Our top labour lawyers in UAE have stated that there are two categories under the scheme:

  • As a basic salary, employees who earn AED 16,000 or less per month must pay AED 5 per month or AED 60 annually.
  • The second category is employees earning more than AED 16,000 as a basic salary, they will be paying double the amount of the first category i.e. AED 10 per month or AED 120 annually(subject to VAT). The unemployed worker can receive 60% of his previous salary up to a monthly amount of AED 20,000.

The employee can get a maximum of three claims in one month(up to three months in total) provided the employee has subscribed to the scheme for at least 12 months. There are three channels available for claiming the amount within thirty days of unemployment, and the claimant will receive the compensation in cash sum within two weeks of request.

This scheme will attract skilled professionals and talented workers to the country, reduce business risks and boost foreign direct investment. Subscribing to the insurance scheme is also easy;throughthe insurance pool’s website or smart application, bank ATMs, kiosk machines, business service centres, currency exchange companies, Telecom providers du and Etisalat or SMS subscription can be made. It is to be noted that domestic helpers, part-time employees, investors working in their own company, pension-receivingretirees, employees dismissed for disciplinary reasons and workers under the age of 18 years do not qualify for this scheme.

BSB Legal consultants is a specialized law firm. We take matters involving labour law, employment contracts, business set-up, company law and litigation. We strive for 100% client satisfaction. Contact or call 97 15080 14003 for legal solutions!

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