UAE job loss insurance: 3 fines for violations, failure to subscribe before June 30

UAE job loss insurance: 3 fines for violations, failure to subscribe before June 30

Deadline applies to all employees of both private companies and government entities

By Web Desk Published: Wed 26 Apr 2023, 3:26 PM

The grace period for unemployment insurance subscription is ending soon — and employees who fail to meet the June 30 deadline will have to pay penalties.

It is mandatory for all employees of both the public and private sectors to sign up for the scheme under Federal Decree-Law No. 13 of 2022. Subscription opened on January 1, 2023.

Officially called Involuntary Loss of Employment (ILOE) insurance, it seeks to provide residents with financial security in case they lose their jobs due to reasons other than disciplinary action or resignation.

After the June 30 deadline, stiff fines shall be imposed on those who fail to comply with the law — including those who do not subscribe. Unpaid penalties shall be deducted either from the employees' salary or end-of-service benefits.

Here are three penalties and violations that have been specified in the law:

1. Dh400 fine: For employees who fail to subscribe to the scheme before June 30, 2023.

2. Dh200 fine: For failing to pay premiums for more than three months from the due date. (This violation will also lead to the cancellation of insurance certificate)

3. Dh20,000