UAE announces new unemployment insurance schemes: All you need to know

0
194

UAE expats and nationals will be eligible for unemployment insurance, a new programme aimed to safeguard people against job loss.

According to various reports on Thursday, Abdulrahman Al Awar, Minister of Human Resources and Emiratisation, announced that employees who lose their jobs due to unforeseen circumstances will receive a basic cash payment each month.

Also read: Travelling to UAE? look at the new entry and residence scheme for foreigners

According to the scheme, 60 per cent of their basic earnings will be provided each month for a limited time until they find another job.

Effective from early 2023, the mandatory scheme applies to employees of all nationalities working in the public and commercial sectors. The new insurance scheme aims to improve labour market stability and attract more Emiratis to work in the private sector.

It is part of the UAE’s most recent sweeping reforms aimed at attracting and retaining talent while also increasing the country’s labour market’s competitiveness.

On the other hand, investors, domestic workers, employees on temporary contracts, minors under the age of 18, and retirees with pensions or new employment opportunities will not be eligible for the policy.

How does it work?

Employees will be able to apply for various yearly packages through insurance firms in order to protect themselves against job loss.

The redundancy payout will allow insured workers who are abruptly laid off to recover 60 per cent of their basic earnings, up to a maximum of Dh20,000 each month. The mandatory insurance package would cost workers between Dh40 and Dh100 each year.

Employees, however, have the option of applying for higher insurance packages. Insurance packages will be designed to include a wide range of wages and match everyone’s financial competence.

If the dismissed employee does not find another employment within a reasonable time, the financial assistance will be terminated.However, employees will be given insurance policies that will help them financially secure themselves for a longer period of time.

Also read: Dubai ready to conquer the future with a new world record

Cover Image Source: Wiki Commons