The Ministry of Human Resources and Emiratisation (MoHRE) in the UAE announced that over 6.5 million employees have subscribed to the country’s mandatory job loss insurance scheme.
Subscription to the scheme was open from January 1 to October 1, and a Dh400 fine will be imposed on workers who failed to enroll.
Penalties for Non-Enrollment:
- Workers who did not enroll will incur a Dh400 fine.
- If fines are not paid within three months from the due date, they will be deducted from salaries, end-of-service gratuity, or alternative methods deemed acceptable by MoHRE.
- Workers with unpaid fines will not be eligible for a new work permit until all fines are cleared.
Exemptions from the Scheme:
- Exemptions include investors (business owners who own and manage their establishments), domestic workers, temporary employees, minors under 18, and retirees who receive pensions and have joined a new employer.
Aim of the Scheme:
- The job loss insurance scheme covers citizens and residents working in the private and federal government sectors.
- It aims to provide a social safety net for citizens and residents, ensuring a decent life for them and their families during unemployment.
- The scheme also aims to attract and retain top global talent in the UAE labor market.
Insurance Categories:
- The scheme is divided into two categories based on basic salary.
- Category 1 covers those with a basic salary of Dh16,000 or below, with a monthly premium of Dh5 and a maximum monthly compensation of Dh10,000.
- Category 2 includes those with a basic salary exceeding Dh16,000, a monthly premium of Dh10 and a maximum monthly compensation of Dh20,000.
Eligibility and Claim Process:
- Employees can claim insurance compensation if enrolled for at least 12 consecutive months.
- Compensation cannot be claimed if the employee cancels residency, leaves the country, or takes up a new job.
- Compensation is offered for a maximum of three months from the date of unemployment, provided the employee was not terminated for disciplinary reasons and did not resign.
- Claims will be processed within two weeks of submission.
The job loss insurance scheme is designed to provide financial support to employees during unemployment, offering protection and assistance in finding alternative employment opportunities.
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