The registration deadline for the UAE's mandatory unemployment insurance programme officially closed on 1 October 2023. Workers who did not register by this date will face a fine of AED 400 (US$ 109), and those who fail to pay premiums for three months after the deadline will incur an additional fine of AED 200 (US$ 54). Workers new to the country's labour force have four months to enrol before incurring fines.
In force since the beginning of this year, the unemployment programme is a private insurance scheme that is compulsory for all public and private sector workers, with the exceptions of domestic workers and a limited group of other workers. Workers in free zones, semi-government and local government bodies may opt to enrol. Once a worker has been enrolled for 12 months, the scheme provides limited cash benefits during the first three months of involuntary unemployment.
Unlike most unemployment benefit systems that automatically register workers and deduct premiums at the source, workers in the UAE are solely responsible for registering and paying premiums. Though the UAE’s Ministry Of Human Resources & Emiratisation (MOHRE) recently announced that employers now have the option to register their employees in the scheme, it emphasised that “it remains the responsibility of the employee to subscribe, not the employer, who incurs no additional costs.” Unpaid fines are deducted either from a worker’s salary or end-of-service benefits. According to Article 10 of the Ministerial Resolution No. 604 of 2022 Concerning Unemployment Insurance Scheme, workers who fail to pay fines will not be allowed to receive new work permits until they are cleared.
The majority of workers in the UAE have registered for the programme, following an extension of the original June 30 deadline. According to the MOHRE, approximately 5.73 million workers in the UAE have subscribed to the scheme as of September 25, 2023, comprising more than 5.6 million workers in the private sector and over 87,000 workers in the public sector. The UAE’s total workforce is estimated to be around 7 million, according to the most recently available data from 2020. This potentially means that thousands of workers remain unenrolled and now face penalties.
Several workers reported difficulties and confusion on social media, including being unable to enrol due to not having received labour cards yet and encountering problems with the online registration portals. Some workers also stated that they were unaware of the programme.
The privatised nature of the programme — in which workers bear the sole responsibility for registering with private insurance providers, instead of the state providing insurance and automatically collecting premiums — is the source of many of these issues. Across the GCC, private insurance schemes are emerging to provide primarily health and employment related services to migrant workers. This privatization of these entitlements is increasing the degrees of separation between the state and its residents, and consequently diluting the obligations of the state as the guarantor of social protection. As previously highlighted in our report on social protection in the Gulf, this approach carries the risk of exacerbating inequities in access, escalating costs, and excluding certain groups.