UAE Imposes Fines on Non-Compliant Employees in Unemployment Insurance System

Employees failing to adhere to the directives of the unemployment insurance programme are currently liable to face monetary penalties imposed by the Ministry of Human Resources and Emiratisation.

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This includes those who have not committed to participation or neglected to pay their premiums as per their chosen payment frequency.

Grace Period Ends

The legal timeframe for system enrollment concluded last October, marking ten months since its implementation on January 1st. During this period, workers were granted a grace period to join the system without incurring financial penalties and to avail themselves of the associated benefits.

Fine Details

Approximately 14% of employees faced financial penalties for non-compliance. Failure to participate resulted in a 400-dirham fine, while not adhering to premium payment schedules incurred a 200-dirham penalty.

Payment Methods and Options

The Ministry promotes the use of its website, smart application, and authorised business service centres for the settlement of penalties. Furthermore, installment payment requests can be made easier for impacted individuals financially through the use of digital platforms.

Exemption Requests

Requests for exemptions that are backed up by paperwork are accepted by the Ministry. In 15 working days, applicants will receive official notification of the result.

Consequences of non-payment

The Ministry stresses the timely payment of fines in order to prevent administrative procedures. People who break the law run the possibility of not being granted a new work permit and having their pay or end-of-service gratuity withheld in addition to fines.

System Overview

Apart from individuals residing and employed in the government and business domains, the unemployment insurance programme boasts a membership of approximately 6.7 million. Certain demographics, including business proprietors, domestic aides, minors, and retirees receiving pensions, are exempt from mandatory enrollment.

Future Compliance

Private sector workers obtaining work permits after October 1, 2023, must enrol within four months to avoid a 400-dirham penalty after the specified deadline.

Registration Channels

Various registration channels, including the Insurance Complex's website, smart application, kiosk self-service machines, ATMs, business service centres, exchange centres, and bank applications, ensure accessibility. Registration can also be completed via SMS or at the insurance complex call centre.

Two-Tiered System

Based on fundamental pay bands, there are two categories under the unemployment insurance system. In the event of unemployment, the programme offers financial support for up to three months; monthly subscription fees and compensation limits vary.

Claim Conditions

A subscription of at least 12 consecutive months is required in order to be eligible for payment. Compensation eligibility is lost while moving overseas or finding a new job. In the event that a legitimate claim satisfying the requirements is submitted, payment will be handled in no more than two weeks. The amount of compensation is determined by taking 60% of the worker's basic pay from the six months prior to the unemployed period.

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