Navigating the Unemployment insurance: 5 Tips for Making the Most of It

The UAE Unemployment Insurance Scheme was announced in May 2022. It is the first program of its kind, offering financial assistance to private sector and federal/government employees in the event of job loss (Compensation).

With a few notable exceptions, the MoHRE has declared that the Scheme applies to all personnel in the commercial and government sectors.

Employees in a free zone are exempt from federal labor laws if they fall into one of the following categories:

1. 1. Domestic workers;
   2. Temporary employees;
   3. Juveniles under the age of 18;
   4. Retired individuals receiving pensions who have joined a new employer and
   5. Investors and business owners who own and manage their business.

The Scheme has been released as a required requirement by the MoHRE, and as of 1 January 2023, all eligible employees can subscribe to the Scheme until 30 June 2023. Workers who start their jobs after January 1, 2023, however, will have until the day the visa status change is applicable to them (plus four months) to sign up for the Scheme.

To date, the Scheme has only been made available to onshore UAE employees who have been registered with the MoHRE; free zone employees in the UAE are therefore unable to participate.

Investment in the Plan

The contributions and benefits of a subscribed employee are laid forth in Federal Decree Law No. 13 of 2022, which was enacted on September 15, 2022. Individuals participating in the Scheme are obligated to make payments (Premiums) to the issued Insurance Policy on a monthly, quarterly, semi annually, or annually basis (Policy).

Premiums for participation in the Scheme will be deducted from employees’ monthly basic salaries in predetermined increments. Salary ranges and their related Premium contributions are detailed here.

• The yearly insurance premium for employees with annual salaries up to and including AED 16,000 is AED 60, or AED 5 per month.
• Salary earners over AED 16,000 are required to contribute AED 10 per month, or AED 120 per year, into their insurance premiums.
• The Premium is non-refundable and must be paid in full by the insured employee within 90 days. If a worker fails to pay their Premium by the due date, they may be ineligible to receive compensation through the Scheme.

Registering for a Program

Multiple channels for enrolling in the Scheme have been made public by the MoHRE. As the Scheme evolves, these details may change, but for now, employees can join the Scheme by:

• UPAY insurance kiosks
• Tawjeeh and Tasheel business service centers
• Al Ansari Exchange
• C3 PAY bank ATMs and
• bank apps

All accept payments made through the Insurance Pool website and mobile app in Dubai.

Every one of these subscription options, with the exception of the Insurance Pool website and mobile app, requires the employee to pay an extra fee.

To enroll using these methods, workers need simply supply their Emirates ID and a valid UAE mobile number. Application for participation in the Scheme will be requested from the employee, and the terms and conditions of coverage will be outlined in a Policy. A certificate of insurance coverage will be sent to the worker as part of the policy.

The MoHRE has designated Dubai Insurance Company (DIC) as the Scheme’s administrator and the authorized insurer to issue Involuntary Loss of Employment (ILOE) policies on behalf of the ILOE Insurance Pool.

Declaring Damages

Workers must meet the requirements outlined by MoHRE before they may file a claim for benefits under the Scheme.

• a commitment to pay the Premium for a minimum of 12 consecutive months;
• proof that the employee lost their job for reasons other than resignation,
• disciplinary reasons,
• non-peaceful protest and strikes, and
• force majeure incidents; that the employee has not absconded; that there has been no fraud or deceit; and that the subscriber is a resident of the United Arab Emirates.

It is the insured worker’s responsibility to submit a claim form to DIC together with a copy of the termination letter stating the date and cause for termination to DIC no later than 30 days after the date of termination or the date on which the labor court rules on a complaint. You can submit your claim form through the DIC’s website, mobile app, or insurance pool’s call center. The insurance company may need further paperwork before approving payment.

A Compensation Payment

Within two weeks of receiving the claim form, the insurer must deposit the funds into the insured worker’s bank account.

Monthly payments equaling 60% of the claimant’s base salary are to be made for each valid claim.

Here are the maximum payouts:

monthly wage of AED 10,000 for those making less than AED 16,000.

if your monthly income is over AED 20,000 (over AED 16,000), you will be paid.

There will be a three-month waiting time between each insurance certificate granted to an employee. If an insured worker uses up their three-month claim time within the insurance certificate period, for any reason, they must remain subscribers to the Scheme for a full year before filing another claim.

After three months, compensation payments must stop if the insured worker begins a new job.

Conflicts and sanctions

The employee must pay a fine of AED 400 if they don’t sign up for the Scheme. If the required Premiums are overdue by more than three months, a fine of AED 200 will be assessed (subject to the payment plan selected).

• Failure to pay a fine may result in the following actions being taken:
• WPS / End of service or any alternative methods

In the event that the worker does not pay the fines when they are due, the MoHRE may refuse to issue them a new work permit.

Penalties are also applied in the following situations:

• Providing false information to the unemployment insurance agency in order to receive benefits, including but not limited to, pay, job status, and termination details, and working together with the employer to do so.
• Claims for unemployment benefits must be brought before a court in the United Arab Emirates (UAE), which will use UAE law and regulation.

In case of a policy-related complaint, the insured worker may go straight to the insurer, who is obligated to react within five business days. Once that time limit has passed, the covered worker can register a complaint with the Central Bank or take legal action.

In order to maintain compliance, employers must actively promote and direct staff to enroll in the Scheme, receive the Policy, and make timely Premium payments.

In the event that you are interested in receiving expert advice, please do not be reluctant to call our Business Consultant. If you have any questions, please do not hesitate to get in touch with us by e-mail at info@crosslink.ae or by phone at +971 4 321 6631.

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