UAE unemployment insurance scheme to start from January 1
UAE: Unemployment Insurance Scheme to Start From January 1
The United Arab Emirates will make UAE unemployment insurance mandatory on January 1, 2023. According to the UAE's Ministry of Human Resources and Emiratization (MoHRE), the new plan, which was first announced in May, provides compensation of up to three months for employees in the public and private sectors who have lost their jobs.
The unemployment insurance scheme aims to create a low-cost job safety net that assists employees in their career paths by providing job stability at no cost to employers.
What is Unemployment Insurance?
Unemployment insurance provides financial support to individuals who have lost their jobs due to no fault of their own. This type of insurance is funded by employers by paying contributions to a state or federal unemployment fund. Eligible workers can receive payments from this fund for up to 26 weeks, depending on the state they live in.
Unemployment insurance is meant to help individuals during an unexpected loss of a job or reduction in pay and cover living expenses such as housing, food, and utilities while they are looking for new employment. It also helps them maintain their standard of living during difficult times.
To qualify for unemployment benefits, applicants must meet certain eligibility requirements that vary from state to state. These include having worked for a specific period at an employer covered by unemployment insurance and being able and available to work a full-time job immediately after losing your prior one.
Compensation of UAE Unemployment Insurance
According to the MoHRE, anyone who loses their job due to termination of services (other than for disciplinary reasons or resignation) is entitled to a three-month cash compensation. The subscription fees are calculated based on the employee's base salary. Those with a basic salary of Dh16,000 or less must pay a Dh5 monthly subscription fee (Dh60 annually) and are eligible for monthly cash compensation of up to Dh10,000.People earning more than Dh16,000 per month must pay Dh10 per month (Dh120 annually) and are entitled to a maximum monthly cash compensation of Dh20,000.Insurance premiums can be paid monthly, quarterly, biannually, or annually.
The insurance compensation is calculated at 60% of the employee's basic salary in the six months preceding his or her unemployment.Compensation should be paid within two weeks of the claim being submitted. The insured can file a claim through a variety of channels, including the insurance pool's website, app, or call center.To be eligible for cash compensation, the insured must have been subscribed for at least 12 consecutive months. They would, however, lose the right to compensation if they left the country or took a new job.
Investors or owners of establishments where they work, domestic workers, temporary contract workers, minors under the age of 18, and retirees who receive a pension and have started a new job are ineligible to join the insurance scheme.
The insured person must file the claim within 30 days of the date of job loss or the resolution of the labor complaint filed with the courts. According to the insurance program's website, they should also not have an existing complaint related to absence from work. The insured is not entitled to compensation if his claim was fraudulent or deceptive, or if the establishment where they work is fake.
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