By the HR Observer Staff
Employees within the public and private sector must register to be part of the UAE’s new unemployment insurance scheme which came into effect on January 1, 2023; failure to do that will result in a fine.
This social security programme, called the Involuntary Loss of Employment insurance scheme was announced in May 2022, will compensate those who lost their job with cash for three months.
“The Unemployment Insurance scheme is a form of insurance/social security that provides Emiratis and residents working in the federal and private sectors, financial support if they lose their jobs, as a result of termination by their employers.The financial support will be given in exchange of a monthly insurance premium paid by the worker during his employment,” the entity wrote on the government portal.
The scheme is one of the reforms to help maintain talent within the country by supporting them until they find another job. The government explains that the compensation will be calculated at 60 percent of the employee’s basic salary over the most recent six months before the loss of employment for a maximum payment of $5,445 (Dh20,000 ) a month
The Ministry of Human Resources and Emiratisation said it has agreed with nine local insurance companies to operate and fund the scheme.
“Unemployment insurance schemes are provided by a number of selected insurance providers in the UAE,” said Joanna Matthews-Taylor, employment partner at law firm Baker McKenzie in local media reports.
“Employees can subscribe to the insurance programme in a number of ways, including through the insurance pool’s website and its smart application, the employee’s bank, ATMs, money exchange companies, business service centres, kiosk machines, du and Etisalat or directly with an insurance company,” added Matthews- Taylor.
This insurance programme does not cover investors, domestic helpers, part-time employees, free zone employees and other workers under the age of 18 and retirees who, although receive pension, have joined a new job.