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08 December 2023

UAE begins fining non-participants in unemployment insurance system

By E247

The United Arab Emirates began imposing financial penalties on non-participants in the unemployment insurance system on Sunday, October 1, 2023, after the deadline for enrollment expired on Saturday. The fine is 400 dirhams (USD 108) for non-participants in the system, whether they are employees in the federal government or private sector, citizens or residents.

The unemployment insurance system was launched on January 1, 2023, and is designed to provide social protection for employees who lose their jobs. The system has two categories, with different contribution rates and maximum compensation amounts. The first category includes those with a basic salary of 16,000 dirhams or less, while the second category includes those with a basic salary of more than 16,000 dirhams.

Compensation is payable if the employee has been enrolled in the system for at least 12 consecutive months and loses their job through no fault of their own. The compensation amount is calculated at 60% of the employee's basic salary in the six months preceding the unemployment. Compensation is paid for a period of up to three months, or until the employee finds a new job.

The Ministry of Human Resources and Emiratisation has urged all eligible employees to enroll in the unemployment insurance system to avoid the fine and to benefit from the system's benefits. Employees can enroll in the system through the ILOE insurance complex website (www.iloe.ae) or the ILOE smart app.