Job Loss Insurance: Unlisted Employees To Get Fined in UAE

Have you heard that employees in the UAE are going to get fined for not getting insurance against job loss? Yes, it’s true! From January 1, 2023, all employees, regardless of nationality, working in the federal or private sector must register for the unemployment insurance scheme. Employees who do not sign up for the required unemployment insurance will be subject to penalties. In this blog, we will discuss the mandatory unemployment insurance scheme.

Employees with a basic salary of less than Dh16,000 are obligated to pay a monthly fee of Dh5 or a yearly fee of Dh60, including VAT. An employee will be provided 60 per cent of their average basic salary for three consecutive months in the event of job loss. Employees who earn a minimum salary of Dh16,000 are obligated to pay a monthly fee of Dh10 or a yearly fee of Dh120.

As per the report by Khaleej Times, Joanna Matthews-Taylor, a partner at Baker McKenzie, stated that any employee who neglects to sign up for an unemployment insurance plan will face a fine of Dh400. Joanna added that employees who don’t register in an insurance plan and make no payments for over three months must pay an extra Dh200.

A representative of the Involuntary Loss of Employment (ILOE) insurance scheme confirmed to Khaleej Times that employees must sign up for the policy before June 30, 2023, or else they will have to pay a Dh400 fine. Employees can pay the fines via the same channels they used to buy the policy.

Employees can purchase the insurance policy for either one or two years with a free-of-cost subscription from Dubai Insurance. However, other outlets such as foreign exchange businesses, telecom companies, and banks may charge an additional fee for their services.

However, investors, domestic helpers, temporary contract workers, those under 18, and retirees with a pension are not required to sign up for the scheme or face any financial penalty.

According to the report, it is conditional upon the employees to pay contributions to the unemployment insurance scheme for at least twelve months. The scheme benefits will expire either when the employee acquires a new job in the UAE or three months after their last day of employment.

Employers are not obligated to register their workers for an insurance program, nor do they have to make any payments to the policy. The unemployment insurance scheme is only an obligation for employees.

Channels for subscribing

• Involuntary Loss of Employment (ILOE): To subscribe for free, visit iloe.ae or download the ILOE app.
• Subscribe by visiting Al Ansari Exchange, Tawjeeh, Tasheel, kiosks, bank applications, or ATMs for an additional fee.

Here’s How to Register

• Visit the website or ILOE app and click Subscribe.
• Under the Individual tab, select if you are a Private employee or a Federal employee.
• Input your Emirates ID number and your phone number.
• Enter the OTP you receive on your phone to continue the sign-up process.
• A pop-up will appear with your salary and the program category you are eligible for.
• Confirm your details by selecting the check box.
• Select if you want the scheme for one or two years.
• Choose how you want to pay – monthly, quarterly, semi-annually or annually.
• Read and accept the terms and conditions.
• Enter your email address to receive the insurance certificate.
• Finalize the payment.
• Once the transaction is complete, you will get the insurance certificate as a PDF in your email.

Conclusion

Fret not! The mandatory unemployment insurance scheme won’t be overwhelming for you if you seek help from any top tax consultants in Dubai, UAE. Reyson Badger, one the leading accounting and auditing firms in the UAE, can help you with the scheme. With the right support, no need to worry about signing up for new policies, guidelines, or penalties.

Talk To Our Experts Now