On 6 June 2022, Ministerial Resolution No. (279) of 2022 (the "Emiratisation Resolution") was issued by the UAE Government.

Although a programme of Emiratisation has been implemented in the private sector in the UAE for over ten years, the introduction of the Emiratisation Resolution represented a significant development and indicated an increased desire from the UAE Government to enforce its Emiratisation program.

With effect from 1 January 2023, private sector employers registered with the Ministry of Human Resources and Emiratisation ("MoHRE") with more than 50 employees are now required to ensure that at least 2% of their total skilled workforce in the UAE are UAE nationals. Whether or not an employee is considered a "skilled worker" is determined by their role and whether it requires them to hold a degree-level (or equivalent) higher education certificate.

As things stand, UAE nationals employed by an affected company prior to the date the Emiratisation Resolution was issued (6 June 2022) do not count towards that company's quota; that said, this approach will have a disproportionately unfair effect on employers who have historically employed large numbers of UAE nationals, and so it remains to be seen whether or not this position will change in the future.

In the first week of 2023 it has become clear that it is MoHRE's intention to back-date the fines for those employers who are not compliant to cover the entirety of 2022. In some cases this has led to substantial fines, with the company's ability to obtain new work permits being put on hold until those fines are paid.

For those employers who have received a fine, MoHRE have advised that employers can apply to pay the fine in either monthly, quarterly, or bi-annual instalments.

Unemployment Insurance

On 1 January 2023, the UAE's first ever unemployment insurance scheme came into effect for employees working for 'onshore' companies in the UAE. The Scheme is designed to provide security for employees who have lost their jobs for reasons other than disciplinary action or resignation.
The scheme applies to UAE nationals and expatriates that work in both the private and public sector, excluding the following categories:

  1. Investors (owners of the establishment in which they work);
  2. Domestic workers;
  3. Employees under temporary contracts;
  4. Juveniles who are under the age of (18) eighteen years; and
  5. Retirees who receive a retirement pension and have joined a new job.

Those employees who are eligible to utilise the scheme will be required to make payment contributions, either on a monthly or annual basis, based on their basic monthly salary.

Those employees with a basic salary of AED 16,000 or less will pay either a monthly insurance premium of AED 5, or AED 60 annually. Those employees with a basic salary exceeding AED 16,000 will pay either a monthly insurance premium of AED 10, or AED 120 annually.

Employees will be eligible to benefit from the scheme where they:

  1. have subscribed to the scheme for at least 12 consecutive months, and have paid all relevant premiums;
  2. have not resigned or been dismissed from their job for disciplinary reasons;
  3. submit their claim within 30 days from the date of termination of employment; and
  4. are legally resident in the UAE.

Where an employee is eligible to claim, the insurance pay-out will be calculated at 60% of the insured’s basic salary, subject to statutory maximums, for a period of no more than three months from the date of the insured’s unemployment per claim.

Fixed Term contract deadline approaches

Federal Law No. 22 of 2021 (the "Labour Law") came into force on 2 February 2022. The Labour Law introduced a requirement for all employees to be employed on fixed-term contracts by no later than 1 February 2023.  

With that date now approaching, any employers who have not yet transitioned their employees onto fixed term contracts should begin the process in earnest.

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David True

David True

Managing Associate, Employment

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