Dubai: Free zone companies in the UAE can now enroll their employees in the Involuntary Loss of Employment (ILOE), also known as the Unemployment Insurance Scheme – according to an announcement on the ILOE website – iloe.ae, on Monday, September 11.
In May, ILOE had announced that it had opened up the scheme to employees in free zone companies and semi-government organisations in the UAE. With the current announcement, companies can now enroll their employees in the scheme as well, if the employees are unable to register themselves. However, it is important to note that the cost of the insurance policy has to be borne by the employees.
The Unemployment Insurance Scheme is a form of social security that provides workers financial support if they lose their jobs as a result of termination by their employers, except if the individual has been terminated for disciplinary reasons or has resigned.
How can free zone companies register their employees?
Free zone companies can register on behalf of their employees under the ‘non-registered companies in the Ministry of Human Resources and Emiratisation (MOHRE)’ category.
According to the ILOE website, they can do so by sharing the required documents to firstname.lastname@example.org .
• Trade licence copy of the company.
• Request letter to enroll workers on their behalf.
How much will the employee have to pay?
Once a company has registered their employees for the unemployment insurance scheme, the worker will have to pay an insurance premium depending on their category. The payment can be made by the employee on a monthly, quarterly, half-yearly, or annual basis.
After the employee has paid the first instalment, he or she will receive the certificate of insurance.
This certificate is proof that the employee is subscribed to the scheme. The certificate also states that it is the employee’s responsibility to ensure that the insurance instalments are paid on time.
• Employees who are earning a basic salary of Dh16,000 or less.
• Insurance cost: Dh5 per month (or Dh60 annually).
• Monthly compensation: 60 per cent of your basic salary, up to Dh10,000.
• Employees who are earning a basic salary of Dh16,000 and above.
• Insurance cost: Dh10 per month (or Dh120 annually).
• Monthly compensation: 60 per cent of your basic salary, up to Dh20,000.
Deadline for the Unemployment Insurance scheme – October 1
On June 15, MOHRE announced that the deadline to subscribe to the Unemployment Insurance Scheme has been extended from July 1 to October 1, 2023 .
Although the deadline has changed, your deadline may be different if you began work after May 30, 2023. According to experts who spoke with Gulf News, in such cases, employees must register within four months of the start date of employment.