Ask the law: Who pays for unemployment insurance premiums?
Conditions for eligibility for insurance compensation clarified
Question:
I work for a private company and I want to know, according to the labour law, about the unemployment insurance law and who is legally responsible for paying the premium of this insurance – the employer or the worker? Who is responsible for paying the fees of transferring the worker’s salary to the bank? Please advise.
Answer:
1. 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 compensation is on a monthly basis at the rate of 60 per cent of the contribution salary (basic salary) for a period of three months from the date of unemployment, which is the maximum period for compensation for each claim. The scheme applies to all workers in the private and federal sector except:
- investors, business owners who own and manage their business themselves
- domestic workers
- employees on a temporary basis
- juveniles under the age of 18
- Retirees who receive pension and have joined a new employer.
The insured worker will lose his/her eligibility for compensation if any of the following situations occur:
* he/she was dismissed from work for disciplinary reasons under the UAE’s Labour Law in the private sector (Federal Decree Law No. 33 of 2021 Regarding the Regulation of Employment Relationship and its amendments) and the Human Resources Law in the federal government, in addition to any applicable legislations,
* there has been fraud or deceit involved in his/her claim,
* the establishment where he/she works is fictitious.
The financial support will be given in exchange of a monthly insurance premium paid by the worker during his employment, not by the employer.
The employer must encourage and direct his employee to subscribe as per Article 8 of the Ministerial Resolution No. 604 of 2022 Concerning Unemployment Insurance Scheme (Establishments must encourage and direct their employees to subscribe to the scheme, obtain unemployment insurance policies and pay premiums on a timely manner.)
2. The employer is responsible for paying the fees for transferring the worker’s salary to the bank because he pays the salary as per Article 22 of the Labour Law 33 of 2021 (“The employer shall pay the salaries or wages to its workers on their due dates in accordance with the regulations approved in the Ministry, as well as the conditions, rules and procedures specified by the Implementing Regulation.”)