Ask the Law: Do all private sector companies in UAE have to employ Emiratis?

Question: I’m the owner of a company and I want to know in detail the new law on employing Emiratis in private companies. Does it apply to all companies? Are there penalties for non-compliant companies? Please advise.

Answer: Emiratisation means employment of UAE citizens. The Ministerial Resolution No. 258 of 2022 Regarding the Reorganisation of Tawteen Partners Club approved a decision to raise Emiratisation rates to 2 per cent annually for skilled jobs in private sector establishments with 50 or more employees and to achieve an overall rate of increase by 10 per cent by 2026.

All establishments registered with the Ministry, where the number of workers is 50 or more, must raise their current Emiratisation rates at a rate of 2 per cent per year in skilled jobs, up to 10 per cent until 2026, by increasing the number of nationals recruited. The Emiratisation percentages determined are calculated by the total number of citizens working in the establishment in relation to the total number of skilled workers, by appointing at least one citizen for every 50 skilled workers or part of the 50, for each year of application, as follows:

· From 0 to 50 skilled workers, one citizen

· From 51 to 100 skilled workers, two citizens

· From 101 to 150 skilled workers, three citizens

· 151 workers or more, one citizen for every 50 skilled workers or part of 50

Fines

Penalties and fines will be applied on violating companies. Non-compliant companies will have to pay an amount of Dh6,000 monthly, for every citizen who has not been employed.

The amount will be paid through the digital systems of Ministry of Human Resources and Emiratisation (MoHRE), provided that the value of the monthly contributions increases by Dh1,000 annually until 2026.

To monitor the implementation of these decisions in the labour market, MOHRE is working with the Cabinet Secretariat to measure the indicator of Emiratisation in the private sector. Cabinet Resolution No. 95 of 2022 Regarding Penalties and Violations Relating To the Emirati Cadres Competitiveness Council Initiatives and Programs lists administrative penalties and fines against firms who violate Emiratisation and Nafis targets.

The penalties and fines vary according to the nature of the violation committed by the firm.

Violations

· The firm carrying out fake Emiratisation and submitting false documents or data to get benefits associated with Nafis

· The employee not joining work after the work permit is issued and the establishment continues to get support from Nafis

· The employee benefitting from Nafis shows non-commitment towards work and the employer fails to notify Nafis

· The firm not employing the Emirati after he/she completed the Nafis training program and fails to give a valid justification

· The firm not reporting any change in the terms of the benefit without reason acceptable to Nafis

A maximum fine of Dh100,000 may be levied for each false hiring and all the benefits given to the firm would be stopped and any benefits already distributed would have to be returned.