The United Arab Emirates has introduced an Unemployment Insurance scheme, and while the general deadline for workers in the federal government and private sector to subscribe is set for October 1, 2023, there are specific cases where this deadline might differ. This is particularly relevant for those who signed their employment contracts after May 30, 2023.
Details on the Subscription Deadline: Employees in the UAE’s federal government and private sector are mandated to subscribe to the Unemployment Insurance scheme, officially known as the Involuntary Loss of Employment (ILOE). Joanna Matthews-Taylor, Partner and Head of Employment at Baker McKenzie UAE, clarified that the date of the employment contract will determine when an employee must register with the unemployment scheme and begin making contributions.
- Key Deadlines:
- For employment contracts signed before May 30, 2023, the registration deadline is September 30, 2023.
- Employees who began work after May 30, 2023, must register within four months from their employment start date.
Matthews-Taylor further explained that while the official deadline to register for the unemployment insurance scheme is September 30, 2023, there’s a four-month grace period for employees who commenced their roles after February 28, 2023. This means that anyone starting after May 30, 2023, will have a different deadline based on their start date. It’s worth noting that these details, although discussed with authorities, could be subject to change.
Potential Consequences of Missing the Deadline: Employees who miss the registration and payment deadline might face fines. Additionally, there’s a possibility that a new work permit might not be granted if there are outstanding fines.
Important Aspects of the ILOE:
- Premium Payments: Navandeep Matta, Senior Associate at Kochhar and Co. legal consultants, emphasized the importance of not missing insurance premium installments. Failure to pay the prescribed insurance premiums could lead to a rejection of Unemployment Insurance benefits.
- Criteria for Compensation: To claim the benefits of Unemployment Insurance, workers must meet nine specific conditions listed in Article 9 of the Cabinet Decision No.97 of 2022. These conditions range from having a legal residence in the country to providing evidence of unemployment due to reasons other than personal resignation.
- Payout Amount: In the event of job loss, an employee can claim benefits equivalent to 60% of their basic pay as per the unemployment insurance scheme, provided all conditions under Article 9 of the Cabinet Decision of 97/2022 are met.