UAE mandates worker insurance for all new hires

Abu Dhabi: Private sector employers in the UAE must purchase an insurance policy for every employee before obtaining a work permit, under a labour protection scheme that guarantees workers' financial entitlements, including unpaid wages of up to Dh20,000 over a 30-month period if an employer fails to meet its obligations.

According to Emarat Al Youm, the requirement is part of the Ministry of Human Resources and Emiratisation's Worker Protection Insurance scheme, which offers four insurance packages covering different categories of workers and businesses.

Annual premiums range from Dh40 to Dh100, depending on the worker category, while the policy also covers the cost of repatriating a worker's remains in the event of death.

The details were outlined in a guidance package issued by the ministry for employers, setting out key legal obligations and employment rights under UAE labour law. The package is designed to support a stable labour market by ensuring employers and employees understand their responsibilities while promoting compliance with employment regulations.

Among the measures highlighted, employers are required to bear all recruitment costs, government fees, guarantees and insurance expenses associated with hiring workers. They must also provide basic training, ensure employees understand their contractual rights and obligations, and pay wages on time through the Wage Protection System (WPS).

The guidance also sets out employees' statutory rights, including 30 days of paid annual leave after one year of service, maternity leave of 60 days, sick leave of up to 90 days, parental, bereavement and study leave, as well as end-of-service gratuity for expatriate workers after one year of continuous employment. 

Employers are prohibited from withholding workers' passports or official documents and must provide a certificate of employment free of charge upon request, stating the employee's last salary and reason for leaving without including information that could harm future employment opportunities.

The ministry also outlined its Emiratisation requirements, noting that companies exceeding their hiring targets while maintaining full compliance with labour regulations may qualify for first-category status and membership of the Emiratisation Partners Club, giving them access to discounts of up to 80 per cent on ministry services.

The guidance warns of 11 labour violations that could lead to administrative penalties, including delayed wage payments, fraudulent Emiratisation practices, operating businesses that do not carry out genuine commercial activity, misuse of electronic ministry services, providing false information, failing to renew mandatory documents, failing to appoint trainees after completing approved training programmes, and breaches related to the employment of Emirati citizens.

Companies that delay salary payments also face escalating enforcement measures under the Wage Protection System, beginning with electronic notifications and progressing to restrictions on the issuance of new work permits if the violations continue beyond the prescribed deadlines. The ministry urged employers to pay salaries within the first 15 daysof their due date to remain compliant with UAE labour regulations.