The UAE has set an extended deadline for employees in the private sector, federal government departments, and free zones to sign up for the mandatory Involuntary Loss of Employment (ILOE) scheme. This deadline is set for October 1, and failure to comply will result in fines. The scheme aims to provide a low-cost job security net, offering financial support for a limited duration.
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Key Points:
- Mandatory Subscription: All employees are required to subscribe to the ILOE scheme. Non-compliance will lead to fines.
- Registration: Companies not registered with the Ministry of Human Resources and Emiratisation (MoHRE) can subscribe on behalf of their employees by submitting their trade license and a request letter to companyreg@iloe.ae.
- Penalties:
- A Dh400 fine will be imposed on employees who do not subscribe by the October 1 deadline.
- A penalty of Dh200 will be levied on employees who subscribe but fail to pay the premiums for more than three months from the due date, leading to the cancellation of the insurance certificate.
- Fine Collection: If employees do not pay the fines within three months from the due date, the amount will be deducted from their wages through the Wage Protection System, end-of-service gratuity, or any other method deemed acceptable by the MoHRE.
- Impact on Work Permit: Non-payment of fines will render an employee ineligible for a new work permit until all fines are cleared within the specified timeframe.
- Exemptions: The following categories are exempted from the scheme:
- Investors (owners of companies they work at)
- Domestic helpers
- Temporary contract workers
- Juveniles under 18
- Retirees entitled to a pension and have joined a new job
- Subscription Channels: Employees can subscribe via the ILOE website and app, Al Ansari Exchange, Business centres Tawjeeh and Tasheel, Etisalat, Kiosks (upay and MBMEPay), and Botim.
- Scheme Functionality: Employees pay a minimal premium to join the ILOE. If they lose their jobs for reasons other than disciplinary action or resignation, they receive financial support for up to three months. However, they become eligible for compensation only if they’ve been subscribed for at least 12 months.
- ILOE Plans:
- Category A: For basic salaries of Dh16,000 or below, the cost is Dh5 + VAT per month. Compensation is 60% of the basic salary, up to Dh10,000 per month.
- Category B: For basic salaries above Dh16,000, the cost is Dh10 + VAT per month. Compensation is 60% of the basic salary, up to Dh20,000 per month.
- Benefit Duration: The benefits are offered for up to three months and will cease if the beneficiary finds a new job or leaves the UAE.
- Conditions for Compensation: A minimum subscription period of 12 months, timely payments, not resigning from employment, not being dismissed for disciplinary reasons, and submitting the claim within 30 days from the date of termination or the settlement of the labor complaint referred to the judiciary.
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