UAE job loss insurance scheme: Who pays and subscribes, employee or employer? Law clarified

UAE job loss insurance scheme: Who pays and subscribes, employee or employer? Law clarified

As part of the new initiative, involuntarily unemployed Emiratis and expat workers in the private sector will be eligible for 60 per cent of their basic salary for three months

Published: Wed 4 Jan 2023, 6:00 AM

Employers in the UAE are neither required to register their employees nor pay for the mandatory job loss insurance scheme, which came into effect on January 1, 2023.

Under the newly-launched scheme, Emiratis and expat workers employed in the private sector and the federal government must subscribe to the insurance scheme by June 30, failing which they will be subject to a Dh400 fine.

Joanna Matthews-Taylor, partner, Baker McKenzie, said subscriptions are to be paid by the employees because a Certificate of Insurance for the coverage will be issued to the employees.

Naji Khairallah, Senior Associate, Galadari Advocates and Legal Consultants, said with regard to the mechanism of collecting insurance premiums, Article (6) of the Resolution states there are no costs borne by the employer or the entity for which the employee works.

A call centre representative of the Involuntary Loss of Employment (ILOE) Insurance Scheme told Khaleej Times that company is not allowed to register its employees for the insurance scheme and then deduct the money from their