MoHRE Extends Deadline for Unemployment Insurance Scheme Registration Fines to 1st October 2023!

Dubai, June 17th, 2023:

While extending the deadline, The Ministry of Human Resources and Emiratisation (MoHRE) has reminded individuals that a fine of Dh400 will be imposed for failure to register for unemployment insurance.

The Ministry of Human Resources and Emiratisation (MoHRE) in the UAE has recently communicated a revised timeline regarding the enforcement of fines associated with the registration for unemployment insurance. The new deadline has been extended from July 1, 2023, to October 1, 2023, and allows individuals additional time to comply with the mandatory registration requirement without incurring penalties.

Failure to comply with this rule would invite a penalty of Dh400, which underscores the government’s commitment to promote economic stability and protect the welfare of individuals during periods of unemployment.

What is Unemployment insurance in UAE?

The UAE government introduced a groundbreaking insurance scheme last year specifically designed for unemployed individuals in both the government and private sectors, including Freezone.

Under this initiative, eligible employees are entitled to receive 60% of their basic salary for a maximum period of three months from the onset of unemployment. Notably, the insurance plan has a monthly cap of DH20,000 and became mandatory for all UAE employees starting from Sunday, January 1, 2023.

Since its implementation in January, an impressive 4.6 million employees have voluntarily enrolled in this insurance scheme. The recent extension of the registration deadline comes as a welcome relief, particularly for blue-collar workers, as it grants them additional time to participate in the scheme.

It is important to note that, according to the guidelines established by the MoHRE, the onus of subscribing to the unemployment insurance scheme lies with the employee rather than the employer.

Qualifying Factors

Under this scheme, employees who experience termination for non-disciplinary reasons are eligible to receive cash compensation equivalent to 60% of their average basic salary during the six months before their termination. This compensation will be provided for three months from the date of their job loss.

To qualify for compensation, individuals must have been enrolled in the scheme for a minimum of 12 consecutive months and they are required to submit a compensation application within 30 days of leaving their employment. However, it has to be noted that their departure should not be due to disciplinary action, resignation, or any fraudulent activity.

It is also important to note that employees will not be eligible for compensation if they secure new employment or leave the country during the compensation period.

Monthly Subscription Fee

For employees earning a basic monthly salary of Dh16,000 or less, the subscription fee for the unemployment insurance scheme will exceed Dh5 per month. On the other hand, workers with basic salaries surpassing Dh16,000 are required to pay a subscription fee of Dh10 per month.

The implementation of this tiered fee structure ensures that the financial burden placed on employees remains proportionate to their earnings.

The following categories are exempt from the unemployment insurance scheme:

• Investors
• Domestic helpers
• Temporary-contract workers
• Juveniles under the age of 18
• Retirees who are already entitled to a pension and have started a new job.

How do you apply for the unemployment insurance scheme?

• To subscribe to the unemployment insurance scheme, individuals are required to visit the iloe.ae website and click on the “Subscribe Now” option.
• Follow the provided steps to complete the subscription.
• Employees can also use various subscription channels to subscribe to the scheme, which includes the Insurance website, its App, bank ATMs, kiosk machines, business service centres, money exchange companies, as well as Al Ansari Exchange. The subscription can also be done via SMS.