Abu Dhabi: The grace period to subscribe to the unemployment insurance scheme in the United Arab Emirates (UAE) is ending soon and employees who fail to meet the September 30 deadline will have to pay penalties.
It is mandatory for all employees across the country, including freezone and federal government workers to sign up for the scheme.
Officially called the Involuntary Loss of Employment Insurance (ILOE) scheme, which came into effect on January 1, 2023, seeks to provide financial security to residents in the event they lose their jobs for reasons other than disciplinary action or resignation.
Nearly five million employees have signed up for the unemployment insurance scheme.
From Sunday, October 1, heavy fines will be imposed on those who do not comply with the law – including those who do not sign up. Unpaid fines will be deducted from the employee’s salary or end-of-service benefits.
If you do not pay all of your fines, you may be denied a new work permit, which will prevent you from joining a new job.
Here are the fines and penalties
- Dirhams 400 (Rs 9,026)— For employees who fail to subscribe to the scheme before September 30.
- Dirhams 200 (Rs 4,513)— For failing to pay premiums for more than three months from the due date.
- Dirhams 20,000 (Rs 4,51,333)— For employers who cooperate with the insured to receive unemployment insurance benefits
Benefits
Those covered by unemployment insurance can receive up to 60 percent of their average base salary if they lose their jobs. Cash benefits are provided for a maximum of three consecutive months for each claim.
However, in order to file a claim, the employee must have been paid the wages for at least 12 consecutive months. Proof of involuntary unemployment must be submitted within 30 days.
Subscription fees and compensation
First category
- Basic salary of Dirhams 16,000 (Rs 3,60,969) and less
- The insurance cost: Dirhams 5 (Rs 112) per month
- Monthly compensation will not exceed Dirhams 10,000 (Rs 2,25,605).
Second category
- Basic salary exceeding Dirhams 16,000
- The insurance cost: Dirhams 10 (Rs 225) per month
- Monthly compensation will not exceed Dirhams 20,000.
Who are exempted from the scheme?
- Investors (owners of companies they work at)
- Domestic helpers
- Temporary contract workers
- Juveniles under the age of 18
- Retirees who are entitled to a pension and joined a new job
How to apply for unemployment insurance?
The insurance will be made available through various platforms, information from MoHRE said.
- ILOE website and its smart application
- Bank ATMs and Kiosk machines
- Business service centres
- Money exchange companies
- du and Etisalat
- SMS
- Other channels that MOHRE specifies with the service provider (insurance company).
Sign up on the ILOE website
- Visit the website
- Click on “subscribe here” to access the registration page
- Select the appropriate sector you are employed in; enter your personal identification data, phone number and verification code sent via SMS; choose your preferred payment interval (monthly, quarterly, semi-annual or annual); enter your email address
- Go to the payment gateway to complete the registration successfully.
