Dh114 million in compensation for unemployed workers in UAE

Abu Dhabi: The Ministry of Human Resources and Emiratisation (MOHRE) has announced that 83 per cent of the targeted workforce in the private sector was covered under the Unemployment Insurance Scheme by the end of 2024.

The ministry highlighted that the innovative Unemployment Insurance Scheme provides necessary protection for workers in the event of job loss, offering them a monthly cash compensation based on their basic salary as registered in their employment contract. This coverage extends for up to three months from the date of unemployment until the worker secures a new job.

Commenting on the statistics, Dalal Saeed Al Shehhi, Acting Assistant Undersecretary for Labor Protection at MOHRE, stated that the total amount disbursed as unemployment compensation in 2024 exceeded Dh114 million.

The official emphasised that the scheme aims to provide temporary financial support to insured individuals in the event of job loss, ensuring social protection and financial stability for employees and their families during the transition period until they find new employment. This is in line with Federal Decree-Law No. 13 of 2022 on Unemployment Insurance.

The ministry clarified that the compensation is 60 per cent of the insured salary, with a maximum monthly limit of Dh20,000 for a maximum duration of three months from the date of unemployment. The total coverage under the scheme is capped at 12 months over the insured individual’s entire period of employment in the UAE.

The ministry further explained that the Unemployment Insurance Scheme allows employees to negotiate additional benefits with their insurance provider, as long as the provider is licensed by the Central Bank and meets the requirements for offering unemployment insurance. The disbursed compensation does not affect any other entitlements or benefits owed to the insured individual.

The provisions of Federal Decree-Law No. 13 of 2022 apply to all employees in the private sector and the federal government sector, including UAE nationals and expatriates. However, certain categories are exempt from the scheme, including investors (business owners working in their own companies), domestic workers, temporary contract workers, individuals under 18 years old, and retirees receiving a pension who have re-entered the workforce.

In its latest report, MOHRE revealed that 10,500 workers benefited from the Unemployment Insurance Scheme in 2024. These individuals received financial compensation during their period of unemployment, in accordance with the scheme’s eligibility criteria.

The ministry stated that the Unemployment Insurance Scheme, which now has around 9 million subscribers, serves as a social safety net for employees in both the federal government and private sectors. The scheme ensures financial stability by providing monetary compensation for up to three months to workers who have lost their jobs, helping them sustain their livelihood until they secure alternative employment.

The Unemployment Insurance Scheme is divided into two categories:

• Category 1: Workers earning a basic salary of Dh16,000 or less. The monthly insurance premium for this category is Dh5 (or Dh60 annually), with a maximum monthly compensation of Dh10,000.
• Category 2: Workers earning a basic salary above Dh16,000. The monthly insurance premium for this category is Dh10 (or Dh120 annually), with a maximum monthly compensation of Dh20,000.

The compensation is calculated at 60 per cent of the insured salary, with a maximum cap of Dh20,000 per month, for a maximum period of three months from the date of unemployment.

MOHRE reiterated that the maximum duration of compensation is three months per claim, with a total coverage cap of 12 months over the entire employment period in the UAE.

On its official website, the ministry also reaffirmed that certain categories are exempt from the scheme, including investors (business owners working in their own companies), domestic workers, temporary contract workers, individuals under 18 years old, and retirees receiving a pension who have re-entered the workforce.

Conditions for compensation eligibility
According to MOHRE, employees must meet four key conditions to qualify for unemployment compensation:

1. The insured individual must have been enrolled in the scheme for at least 12 consecutive months.
2. The worker must not have been dismissed for disciplinary reasons, as per UAE Labor Law and federal government HR regulations.
3. The claim must not involve fraud or deception, and the employing company must not be fictitious.
4. The insured individual must not be employed elsewhere during the compensation period, as payments cease if the person finds new employment.

MoHRE emphasised that the Unemployment Insurance Scheme allows employees to negotiate additional benefits with their insurance providers, as long as they are licensed by the Central Bank. The Ministry also clarified that the compensation received does not affect any other financial entitlements due to the insured individual.