UAE: Unpaid fines for not subscribing to job loss insurance may be deducted from salaries

UAE: Unpaid fines for not subscribing to job loss insurance may be deducted from salaries

Employees who don’t pay the penalties will not be eligible for new work permits

Published: Thu 5 Jan 2023, 6:00 AM

Subscribing to the UAE’s unemployment insurance scheme is a mandatory requirement for all employees of federal government departments and private sector companies. Subscription to the scheme started on January 1, 2023. Employees will have to subscribe to a scheme before June 30, 2023, failing which they will be fined Dh400.

A ministerial resolution details how the fines will be collected. Under ‘fines and collection methods’, the ministerial resolution states: “Workers/employees who fail to pay their fines for three months from the due date will have the fine amount deducted from their wages through the Wage Protection System, end-of-service gratuity, or any other alternative method deemed acceptable by the Ministry (of Human Resources and Emiratisation).”

Another article in the resolution states that the employee will not be eligible for a new work permit until all due fines are paid “within the specified timeframe”.

Other fines

The resolution states that if the insured fails to pay the insurance premiums for more than three months from the due date, the insurance certificate will be cancelled and a penalty of Dh200 imposed.

If an employer colludes with the insured to