UAE announces new discounts on fees for expats’ work permits at private companies

Dubai: Private companies in the UAE can from June 1 avail major discounts on government fees for issuing work permits for expats, as part of incentives for meeting or exceeding targets such as Emiratisation and other criteria, it was announced on Tuesday.

Dr Abdul Rahman Al Awar, Minister of Human Resources and Emiratisation, made the announcement at a media briefing in Dubai, during which he explained three new categories for companies.

“The new system depends on the extent of their [companies’] commitment to the law and Wage Protection System, workers’ rights protection and their compliance with the policy of promoting cultural and demographic diversity,” Al Awar said during the briefing at the ministry’s headquarters.

What are the new categories?

Companies will be listed in the first category if they exceed their Emiratisation rate at least three times above their target – and pay only Dh250 per work permit, he added.

The fee and validity of the permit will cover a year-two period.

Firms in the second category will pay Dh1,200 per permit and those in the third category will pay Dh3,450 per permit.

However, issuing a work permit for two years to a worker hired from within the UAE would be Dh250 for all companies if the worker has a valid residency in the UAE.

The employment of Emiratis and GCC citizens is exempted from these fees.

The new classification system will abolish the previous system as per the new Cabinet Resolution No 18 of 2022 on classifying private sector companies. It aims to simplify procedures, boosting entrepreneurship and the business sector’s attractiveness.

The new system will start from June 1.

Automatic placement

“The new interactive automated system without human intervention will place companies in the appropriate categories. The system can change the classification of companies in a transparent manner according to software that takes into consideration each company’s procedures or transactions undertaken,” said Al Awar.

Moving up and down categories

He said that most of the private companies in the UAE will be in the second category but they have a chance to be promoted to the first category to enjoy the discounted fees. Meanwhile, other companies will drop to the third category in case of non-compliance with the policies, laws, and resolutions regulating the labor market.

First category criteria

Al Awar said that companies in the first category need to meet at least one criterion in the new system.

“The criteria include raising the company’s Emiratisation rate at least three times above the target, cooperation with ‘Nafis’ programme to train at least 500 Emiratis annually or being a venture owned by a young citizen according to approved standards in this regards,” he added.

According to the ministry, the Emiratisation rate is two per cent annually from high-skilled jobs in establishments that employ 50 workers or more, until achieving the 10 percent target by 2026.

Other criteria are being one of the training and employment centres that support implementing the workforce planning policy by promoting cultural diversity in the UAE or being active in the targeted sectors and activities determined by the cabinet.

Secondary category

Companies that do not meet any of the above criteria, while committing to the law and policy of promoting cultural and demographic diversity in the UAE, will be automatically classified in the second category.

Third category

“Companies that show a lack of commitment to protecting workers’ rights or not promoting cultural and demographic diversity in the UAE labour market will be in category three. It also includes companies who have violations of the provisions of law No.33 of 2021 regarding the labour relations and regulations,” he said.

Companies can also be classified in category three if they commit other violations including a final verdict on a company committing a human trafficking crime, using or recruiting workers without obtaining work permits for them, providing incorrect data, documents or information to the ministry, violating obligations to workers’ wage protection, housing and safety standards for workers, resorting to fake Emiratisation practices, or committing other serious violations in the labour market.

“The new classification system will achieve a number of vital goals that serve the national economy. The system will enhance economic diversity and support the development of employment mechanisms to create fair and equal opportunities in the private sector in a way that enhances the UAE’s values of tolerance and cultural demographic diversity,” added Al Awar.

Ministerial support

The ministry will provide a clear roadmap for private sector companies in the UAE to upgrade their classification and increase the business predictability for investors.

“The ministry will be keen to support companies with 50 or more employees on their transformation journey with this new decision that promotes cultural and demographic diversity through a transitional period determined by the ministry in coordination with the Ministry of Finance.”

Table of violations

According to the UAE cabinet resolution No. 209 of 2022 on the classification of companies under category three, there is a table of 10 violations that drops the companies to category three.

1. A final judgment issued against the company that committed a human trafficking crime. The duration to stay in category three is two years if the violation is remedied and the fines are settled.

2. Recruiting a worker without obtaining a work permit or non-employment of the worker for whom a work permit was issued or allowing the worker to work for others without changing the status. The duration to stay in category three is three months.

3. Providing incorrect data, false documents or information to the ministry. The duration to stay in category three is three months.

4. Exercising the activity of mediation or temporary recruitment agency without a license issued by the ministry. The duration to stay in category three is three months.

5. If the employer breaches his legal obligations, which led workers to cease work more than twice per year and the establishment fails to correct the reasons for such stoppage. The duration to stay in category three is six months.

6. Failure to pay wages through the wages protection system. The duration to stay in category three is three months.

7. Serious breaches to housing, occupational health or safety standards twice during one year despite warnings. The duration to stay in category three is three months.

8. Serious work injuries resulting in total or partial disability or death due to the company failure to implement occupational health and safety standards and procedures. The duration to stay in category three is three months.

9. False Emiratisation. The duration to stay in category three is three months.

10. Exploiting or abusing electronic facilities granted to access the ministry’s systems which may lead to disruption of work in the ministry. The duration to stay in category three is six months.