Dubai: People working in the UAE’s federal government and private sector have been asked to subscribe to the Unemployment Insurance scheme before October 1, 2023, but did you know the deadline may be different if you signed your contract after May 30, 2023?
Employees in the federal government and private sector in the UAE are required to subscribe to the scheme – officially referred to as the Involuntary Loss of Employment (ILOE). However, Joanna Matthews-Taylor, Partner and Head of Employment at Baker McKenzie UAE, explained that the date of the employment contract will regulate when the employee must register with the unemployment scheme and commence paying contributions.
What is my deadline to subscribe?
According to Matthews-Taylor, all employees in the UAE must enroll to the unemployment insurance scheme as follows:
• If the employment contract was entered into prior to May 30, 2023, then the deadline for registration is September 30, 2023.
• Employees who commenced work after May 30, 2023 must register within four months of the start date of employment.
“Strictly speaking, the unemployment insurance scheme has a deadline of September 30, 2023 to register – but the rules provide for a four-month grace period to register with the insurance scheme for employees who have started their work after February 28, 2023.
“As such, the grace period is counted backwards from September 30, 2023 – making the four-month grace period applicable for anyone who has started after May 30, 2023. Anyone who has started prior to May 30, 2023 will have the same deadline of September 30, 2023, and anybody after will be required to register within four months from the date they started. This is not strictly reflected in the law but reflective of our team’s discussions with the authorities so could be subject to change,” she said.
“If the deadline for registration and payment is missed, the employee risks being subject to fines. There is also a risk that a new work permit will not be granted in the event there are outstanding fines,” she added.
The rules provide for a four-month grace period to register with the insurance scheme for employees who have started their work after February 28, 2023.
Top three things that every expat should now about ILOE
1. Don’t miss your premium instalment or you might not receive insurance benefits
According to Navandeep Matta, Senior Associate at Kochhar and Co. legal consultants, it is extremely important to not miss the insurance premium’s instalment.
“If a worker involuntary loses his or her job due to unforeseeable circumstances and also fails to pay the prescribed insurance premiums, in such a scenario his or her benefits to Unemployment Insurance can be rejected under Article 8(2) of Cabinet Decision No. 97 of 2022 ‘Concerning the Mechanisms and Controls for Implementing the Unemployment Insurance Scheme’ under conditions for claiming insurance benefits. Further, if a worker has not subscribed to unemployment insurance he or she can be fined under Article 1 of Ministerial Resolution No. 340 of 2023 ‘Amending the deadline for imposing fines related to the unemployment insurance system contained in Ministerial Resolution No. 604 of 2022 on Unemployment Insurance system’,” he said.
It is advisable that worker should file his or her claim in good faith supported by documentary evidence.
2. Make sure you fulfil these 9 criteria to claim compensation
“If a worker has subscribed to unemployment insurance, but fails to satisfy the nine conditions mentioned in Article 9 of the Cabinet Decision No. 97 of 2022, his or her claim can be rejected by the competent authority. It is advisable that worker should file his or her claim in good faith supported by documentary evidence,” Matta said.
These are the conditions listed in Article 9 of the Cabinet Decision No.97 of 2022 a worker has to meet to claim the benefit of Unemployment Insurance:
1. The insured period of subscription in the unemployment insurance scheme shall not be less than 12 consecutive months.
2. The insured must be committed to paying all insurance premiums according to the prescribed frequency.
3. Providing evidence of unemployment due to reasons other than resignation of the insured.
4. The insured may not have been dismissed from his or her job for disciplinary reasons according to the applicable laws regulating labour relations in the private sector and human resources in the federal government.
5. A claim must be submitted within 30 days following the termination of the employment relationship, or when the court rules on the labour complaint.
6. The insured may not be the subject of an existing absconding report.
7. In order to obtain compensation, the claim should not be fraudulent or deceitful. Similarly, the establishment where the employee works should not be fictitious.
8. Loss of employment may not be attributed to strikes or other non-peaceful protests, regardless of the extent of damage caused.
9. It is necessary for the insured to have a legal residence in the country.
3. Know how much your payout will be
“If you are being paid a salary of Dh15,000 per month including other allowances and your basic pay is Dh10,000 on the MOHRE contract, then, in the event, that the you lose your job, you can claim the benefits of 60 per cent of the basic pay i.e., Dh6,000 as per the unemployment insurance scheme, provided the you have met all the conditions under Article 9 of the Cabinet Decision of 97/2022.”