Employees who failed to sign up for the UAE unemployment insurance scheme by October 1, 2023 face a fine of AED400.

The unemployment insurance scheme was launched in May 2022 to provide financial protection to employees who lose their jobs. The scheme will allow UAE residents to receive a cash compensation for three months if they lose their job.

The responsibility for registration lies with each employee, but the Ministry of Human Resources and Emiratization has said that employers have the option to register their employees in the scheme.

The fee does is AED5 per month for employees whose basic monthly salary is up to AED16,000, or AED10 per month for those employees earning more than AED16,000.

You can make a single payment – for a year in advance, a quarter in advance, or pay monthly. In case of non-payment, registered employees may also be fined.
Failure to pay for more than three months after the due date will result in a fine of AED200 and the employee’s insurance certificate will be cancelled.

If the fine is not paid within three months from the due date, it will be deducted either through the WPS, termination benefit or any other method approved by the Ministry of Human Resources and Emiratization, the website of UAE government states.

To be eligible for compensation in the event of job loss, the insured person must be registered in the scheme for at least 12 consecutive months.

Those who lose their jobs must file a compensation claim within 30 days of leaving their job, provided they were not fired for disciplinary reasons.

Compensation payments are suspended from the date the employee starts a new job or leaves the country.

According to the ministry, compensation will be paid for a maximum of three months from the date the employee loses his job and will be calculated at 60 per cent of his basic salary, with a maximum payment of AED20,000 per month.

The insurance scheme covers employees of the federal and private sectors, including citizens and residents of the UAE, as well as employees working in free zones.

However, for employees of local and semi-government bodies, as well as for those working in free zone companies, unemployment insurance is not mandatory.

To date, more than 6.5 million employees have enrolled in the program since it went into effect on January 1, 2023.

This includes citizens and residents employed in the private and public sectors, excluding investors, business owners who own and operate their own businesses, domestic workers, temporary workers, persons under the age of 18, retirees receiving pensions, and those just changed employers.